Honey Streams
Creator onboarding streams honey back to the community
Challenges with Traditional AMM-Driven Token Economies
Decentralized Exchanges powered Automated Market Making models (AMMs) have revolutionized decentralized finance by enabling users to trade tokens in a decentralized manner. However, they present inherent challenges for the liquidity providers (LPs) who underpin their operation. One of the most significant issues is Impermanent Loss (IL). IL occurs when the relative prices of tokens within a liquidity pool change. LPs often experience financial losses as the trading fees earned may not sufficiently compensate for the fluctuations in token value, especially in highly volatile markets.
To mitigate IL and attract liquidity, many protocols resort to yield farming. This involves incentivizing LPs with additional token rewards. However, due to fixed token supplies, yield farming models are often unsustainable. As token rewards diminish over time, so too does the incentive for LPs to maintain their positions. This lack of sustained liquidity can negatively impact the health and efficiency of AMM pools, ultimately affecting the entire token economy.
The DegenHive Solution: : Honey-Stream Auctions and the Lock-and-Burn Model
Just like Bee colonies which farm honey as a food source that sustains the colony through winter and periods of adverse weather, DegenHive employs a honey stream powered "Lock-and-Burn" mechanics designed to onboard new creators, where the revenue generated by the protocol (in SUI or MOVE) is streamed into our BEE and HIVE AMM pools. Here, liquidity is perpetually locked, which should prove invaluable during harsh market conditions, providing a steady foundation for our community.
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