Hard Cash DeFi, Governance & Other Uses for Alternative Token Rewards

Last month, TokensFarm released a brand new feature for farms that allows projects to reward farmers with tokens different from those associated with the staking or LP farm, which usually is their native token. This brings new use cases for farms, as it allows projects to reward the stakers in creative ways.

This post will discuss a few alternative token reward use cases that can significantly benefit your crypto project and make your farm stand out.  

At TokensFarm, we offer two distinct types of farms and a unique and customizable vesting contract. The two types of farms are staking and LP farms; both types can use alternative token rewards.

Staking farms reward users with tokens for staking a specific token into a smart contract for a particular duration. LP farms are slightly different. LP farms offer token rewards in exchange for users providing liquidity for a pair on a DEX and staking their LP tokens. LP farms help motivate farmers to provide deeper liquidity for extended periods by compensating them & reducing the risk of impermanent loss. Please read our previous blog post for more information on LP farms and their benefits.

Both types of farms incentivize different behavior and tend to produce different outcomes. Staking farms reduce a token’s circulating supply, which usually translates into reduced sell pressure. LP farms tend to increase a pair’s liquidity on a DEX, and pools with liquidity are much more popular with traders.

Hard Cash DeFi Farm Rewards

Recently the world of DeFi regained public interest with two unique and very different trends. These trends include “real yield” and “hard cash” DeFi protocols. Real-yield DeFi protocols such as ChainPort tend to generate a yield from revenue from fees. A real yield DeFi protocol also needs to avoid token inflation mechanisms to provide long-term stability for their token price.

Hard Cash DeFi platforms are very different by design. They reward users or farmers with yields paid out in stablecoins such as USDT, USDC, or BUSD. These types of platforms, such as NEXO, can become prevalent in uncertain market conditions, as the value of a token can change sharply. Hypothetically, stablecoin rewards for staking can be possible.

As some economists say: “Cash is king in a recession.” and in uncertain times, stablecoin rewards will garner a lot of attention.

With alternative token rewards, rewarding farmers with stablecoins is now possible on TokensFarm. The only requirement is that the staked token and the stablecoin operate on the same blockchain.

Governance Token Rewards

Many different crypto projects have more than one token in their ecosystem. A good example is Chiliz which released several fan tokens for various notable sports teams, including FC Barcelona. The native Chiliz token (CHZ) is a utility token for purchasing fan tokens, while the different fan tokens are mostly used for governance purposes.

Most decentralized autonomous organizations, commonly called DAOs, include a governance token alongside a different one.

Governance tokens are becoming a popular way to keep cryptocurrency communities engaged. As they allow holders to influence a project’s future, holders are less likely to sell their tokens related to the project.

With alternative token rewards, projects can deploy farms and reward users with a governance token.

Play-to-Earn Gaming Token Rewards

Blockchain-based with play-to-earn mechanics has been growing at a fast rate. The best-known blockchain games are probably Axie Infinity and Neon District. Both offer nice graphics, provable ownership of items, and a chance to profit by playing.

Another shared feature used in blockchain games is very complex tokenomics models. Typically these games have two or more tokens in their ecosystem in addition to dedicated NFTs.  

Alternative token rewards would easily complement these blockchain games and could allow rewards that would advance users in the game.

Multiverse Token Rewards

Since the launch of Steven Speilberg’s film: “Ready Player One” in 2018, the concept of the Metaverse has gained traction. Both tech behemoths and much smaller Web-3 blockchain startups are trying to create unique worlds.

The best-known blockchain-based metaverse project is Decentraland. Like blockchain-based games, crypto metaverse projects tend to have complex tokenomics with a few types of tokens as well as NFTs.

Blockchain-based multiverse projects can easily utilize alternative token rewards when launching a farm with TokensFarm.

Farms & the Future

In the near future we may see farms utilizing alternative token rewards in novel and intriguing ways. The only limitation is imagination.

TokensFarm has plenty of more innovations and programs in development that we will share soon. Stay tuned!

About TokensFarm

TokensFarm is the leading cross-chain Farm-As-A-Service provider offering deployable farms that can be live within minutes. TokensFarm’s easy-to-use interface allows projects to incentivize liquidity and reduce a token’s circulating supply. Projects that use TokensFarm gain stability and exposure to around 100k unique users monthly.

TokensFarm supports all EVM chains & DEXs and doesn’t require coding or integration.  At the same time, it enables crypto investors to have a one-stop shop to earn a yield on tokens.

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