Dozens of blockchains and networks compete for traction in the decentralized finance (DeFi) ecosystem. A chain with high throughput, proper scaling, and low fees is bound to gain more momentum as innovation occurs. While somewhat flying under the radar, Elrond aims to up the ante on this front.
The Growth Of DeFi On Elrond
Elrond has checked off several crucial milestones in quick succession as one of the more recent entrants to decentralized finance. The ecosystem’s DeFi segment primarily revolves around Maiar exchange, a decentralized trading platform with an automated market maker (AMM) model. Maiar saw the light of day in November 2021 and surpassed $1.5 billion in Total Value Locked within the first three months.
The growth of this DeFi solution on Elrond can be attributed to the initial token distribution. More specifically, all EGLD token holders could claim MEX utility and governance assets from day one. Those who opted for claiming the tokens forged a commitment to the platform’s success. Hundreds of thousands of users gained exposure to Maiar exchange through this token, and there is more to come.
The Maiar team is distributing $1.29 billion in $MEX tokens as a liquidity incentive to increase its community further. That distribution is currently ongoing and will run until November 2022. Liquidity incentives have proven popular across the DeFi ecosystem, as users can use these rewards to diversify their portfolios. Additionally, long-term MEX holders can – along with EGOLD holders – tap into a new revenue stream courtesy of Metabonding.
Furthermore, Maiar has welcomed almost a dozen new projects in the past two weeks, with more to follow. There is a growing interest in exploring decentralized finance on Elrond through its internet-scaling technology and inexpensive design. Moreover, the Maiar application and exchange provider offers strong incentives and an interface that appeals to newcomers and industry veterans.
Metabonding and Metastaking
Two new features on Elrond are worth keeping tabs on. First, from a DeFi perspective, the Metastaking option combines liquidity provision with staking and yield farming into one package. Metastaking is unique to Maiar and offers a new income stream for liquidity providers through higher rewards. A liquidity provider earns trading fees, the yield from LP staking, and token staking.
Second, there is Metabonding, an Elrond-native solution to gain traction in Web3. Metabonding is a community bootstrapping product for Web3 startups. Additionally, it helps projects building on Elrond establish a long-term commitment with community members through a token distribution scheme over two years. Maiar users can access Metabonding for eligible projects, with the first token distributions occurring on April 15.
Furthermore, EGLD and LKMEX stakers will receive their share of this 10% token lockup. It is a good way for projects to distribute their token gradually and avoid opportunists snapping up tokens to sell them right away. Moreover, long-term Elrond and Maiar supporters can diversify their portfolio through exposure to upcoming Web3 projects.
The approach by Elrond to reward its initial supporters and long-term holders creates a different approach to sustainability in decentralized finance. Although a lot will hinge on the success of the Maiar platform – developed by the Elrond Core team – that may not be a drawback. All these actions and new features lock long-term users tighter into the Elrond fold, and the incentives ramp up to make it more appealing.
Moreover, the Maiar team has confirmed they will burn 250 billion MEX tokens – valued at roughly $75 million. Growing liquidity for the EGLD/MEX pair ensures the initially minted token supply for MEX does not need to enter the market. Burning a part of the total supply serves the long-term interest of investors and token holders.
Another big step forward for all community members supporting Elrond. Additionally, the burn paves the way for Web3 activities and projects leveraging Elrond’s technology.