CRYPTO FLYWHEEL EXPOSED: HOW 1000% APY IS MANUFACTURED
The legendary APYs of $DEFI Summer were not derived from traditional business revenue. They were pure financial algorithms designed to self-inflate value.
This hyper-growth mechanism is the "Flywheel Effect," structurally rooted in the concept of Reflexivity. It is the ultimate feedback loop where price movements don't just reflect reality; they actively shape it. Sentiment amplifies price, and that amplified price generates more sentiment, creating a continuous, self-reinforcing cycle.
A project launches a token—let's call it $UNI for example—and establishes a staking pool offering massive yield paid in the native token itself. This demand sucks in liquidity, driving the token price up. The rising price validates the eye-watering APY, attracting more capital and perpetuating the cycle. While $BTC operates on verifiable fundamentals, these systems are built entirely on the circular belief that future value will justify today’s yield, making them inherently fragile when momentum stalls. Understand the mechanics before you chase the yield.
This is not financial advice. Do your own research.
#Reflexivity #DeFi #CryptoAnalysis #FlywheelEffect #Tokenomics
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