How dexes paying so much in rewards?

I was just wandering how they pay high % for staking and lp providing?

I would assume most people only there to farm yields and not to use the exchange feature. If no one uses the exchange where is the money coming from? New investors? That would be a ponzi… I don’t get it.

Can you please explain? I’m totally dumb!! 🙂

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5 thoughts on “How dexes paying so much in rewards?”

  1. Essentially by printing money, they pay you out in their token which is inflationary and goes down with time thus the APR that you get effectively ends up much less. However some DEXs pay you out in their token plus the blockchain token (FTM, AVAX, MATIC) so those can sometimes be worth it. Some DEXs managed to add value to their token avoiding the devaluation of their token.

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  2. You get a small amount from the liquidity pair fees but the bulk of it when you see some larger number is because they have a native token and they just dump that out to prop up the APY.

    Yield farms like beefy make this ok because they sell the shite and give you back the token you want automatically.

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  3. >I would assume most people only there to farm yields and not to use the exchange feature. If no one uses the exchange where is the money coming from? New investors? That would be a ponzi… I don’t get it.

    Way more people use dexes for actual exchanging than farming

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