Premium #12 - Be The Farmer Not The Crop + Scroll Marks Strategies & More

Mercenary Capital vs Predatory Platforms

The never ending war between farmers and the tokenless farms are only becoming more fierce.

Many times users are getting passively farmed without even realizing it. Here are just a few:

1/ Excessive Fees

Projects are generally in competition with each other to low fees and acquire new users from a limited pool of mercenary capital.

This is healthy, as competition forces better products for consumers.

“Points” have become an alluring veil to hide offensively high (and often hidden) fees. Without points no one would willingly pay more for a bridge or a swap. Add points and users can easily justify the extra expense.

See:

Friendtech = 5% of every trade went to the team (netting them over $27M)

Ekubo = 1% withdrawal fee on the LP position (went to team not the other LPs)

LogX - charge a flat fee every time you want to withdraw anything. This was in addition to much higher trading fees than most Exchanges and decentralized order books. If you farmed the Orderly Galxe campaign you felt the pain of $7+ PER trade with relatively low size and leverage.

Rabby wallet took criticism for recently introducing a hidden fee to swaps without an announcement and requiring the user to scroll down to see it. Previously swaps had zero Rabby fee and earned points. Oblivious farmers are still swapping daily for those points.

This last example shows that even a (previously) well thought of team with a great product are looking for ways to gouge you the user. Stay vigilant or pay.

2/ Point Dilution

Points have no true value, only a perceived or speculative value. $200 of volume on whales.market does not make you pre-rich.

Points are simply a series of 1s and 0s that make up a database entry on a centralized server.

As a practical matter, teams can disperse as many points as they want, whenever they want.

Many projects have turned to the playbook of one off "events” and the dreaded “campaign" offering “bonus” points - for a limited time!

Unfortunately this meta now resembles a “going out of business sale” from your dodgiest discount retail store. Why run one campaign when you can run it back again a few months later?

If you miss out on a boost event, you can end up feeling angry. Now you know you are diluted you might as well wait for the next "boosted" deposit window.

We saw this with Etherfi, when they had to dial back giving away millions of bonus points down to 300k.

Kamino publicly announced the end date of their season along with linear criteria, inviting whales, funds, and mercenary capital to come in and absorb the largest share of the points within a small time period.

Many such cases. From Hyperliquid announcing Season 2 instead of a token generation to Innit Capital diluting their Mantle users by deploying into Blast liquidity. Justin Sun just deposited another $100M+ into your favourite LST protocol.

Dilution is everywhere.

3/ What can you do?

- Start by choosing to use products you enjoy and have at least some sort of use case.

- Be vocal when projects are trying to pull a fast one. We've seen that social pressure actually works, shaming projects into adjusting pie charts and abandoning or scaling down their milking campaigns.

- Do your research and probe for information when needed. If you are not satisfied with the answers or the direction the project is heading, just get out and save your time and capital.

- Don't be discouraged, stay curious. The space is still highly rewarding for early users. In a bull market we are likely to see vampire attacks where “out of nowhere” projects drop tokens to the type of users they value.

This post was greatly inspired by a newsletter post titled "How You Get Farmed: A Rant" from DefiIgnas I highly recommend you check out.

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