If you have been following the DeFi sector's growth, you know that it is a fast-paced industry with new products and services emerging regularly. In less than a year, DeFi has expanded to become a valuable sector within the crypto market. Today, you can get overwhelmed, attempting to keep track of all the new and exciting platforms entering the space.

Of course, not every DeFi platform is original or even legit. There has been a flood of rug pulls in the market to date. These risks have left many investors wondering if DeFi has a long-term future. Thankfully, the developers behind Holder Finance took a different approach to the market altogether.

Why is HFI – Holder Finance Different?

Holder Finance stands out from the crowd with its unique approach to DeFi. This team adds a new aspect to DeFi – HODLing. Until now, the concept of HODLing your DeFi tokens seemed to be counterproductive. These platforms can gain and lose value quickly for many reasons.

One of the main reasons that DeFi platforms continue to see heavy losses is their pool structure. Most DeFi platforms incorporate some form of liquidity pool or yield farming protocol. These systems started as a quick way to earn some passive income. However, the time has begun to show some inherent flaws in the first DeFi pioneers' strategies.

Inflationary Concerns Run Wild

The main problem that legitimate DeFi platforms are facing nowadays is inflationary risks. Inflationary risks are common in the market because of the structure of these networks. For example, when you join a liquidity pool, you receive a liquidity pool (LP) tokens in return for investment. These unique financial instruments serve a couple of critical purposes.

For one, they represent your amount of investment in the liquidity pool. LP tokens also define the overall value of the collection. When more investors fund the pool, the LP token value rises, or at least it's supposed to. The problem with this approach is that you can't have an unpredictable token issuance strategy and retain a steady increase in value.

Its simple economics, if you keep producing tokens, the supply will eventually outweigh the demand. When this occurs, you start to see the structure of these pools become counterproductive. The more liquidity that comes in, the more tokens go out. This scenario leaves the value of the LP tokens suffering.

Combating Inflationary Concerns in the Market

Inflationary risks have led to the development of various deflationary protocols. In many instances, these protocols include automatic conversions, multiple token approaches, and token burns. These strategies are ok, but they still don't tackle the critical problem causing issues, such as unlimited token supply. How can anything retain value when it has no scarcity?

HFI Introduces True Scarcity into the Market

HFI takes an entirely new approach to the problem of DeFi inflationary risks. Specifically, the network introduces the HFI token. This Ethereum-based asset is different from its counterparts in that there are only 1000 HFI tokens scheduled for issuance. This strategy is in direct conflict with most platforms' lackadaisical token distribution.

This scarcity makes HFI the first HODLer-centric project of the Ethereum DeFi ecosystem. HFI token holders reduce any risk of inflation through a predictive monetary issuance policy. Here's how HFI can flip the DeFi sector on its head and create an ERC-20 token that has the potential to retain value more akin to an NFT (non-fungible token).

HFI Token Sale

The first part of their strategy includes a private token sale. Notably, the event is ongoing at this moment. Users can get their hands on HFI tokens at discounted rates and before the Uniswap listing that will take place in a couple of weeks. Notably, anyone who participates in these events gains voting rights in the network automatically.

Uniswap Locked Funds

Another 30 HFI tokens will be minted in early February of next year. These tokens will remain locked in a Uniswap liquidity pool. This strategy helps build investor confidence and reduces a rug pull risk as the funds cannot be accessed until February 2022.

Holder Finance Governance

The entire HFI network utilizes a community governance mechanism to provide users with more control over the project's direction. Decentralized governance protocols are standard in most of today's newer DeFi networks. The more HFI tokens in your wallet, the more weight your vote carries.

Genesis Mining is Set to Begin

The next way to get your hands on some HFI is via the firm's Genesis Mining campaign. This event officially begins in Q1 2021 and ends in Q3 2021. Developers earmarked 380 out of the 1000 HFI in total for miners. Additionally, there are some extra bonuses you can be eligible for depending on what stage of the mining campaign you join. The three mining stages are:

● Bronze Mining

● Silver Mining

● Gold Mining

Staking on HFI

Holder Finance offers staking options to users as well. The network includes two different staking pools. The first form of staking is the mining pools. Users can stake HFI in these pools and receive rewards for their participation. Notably, these pools are designed to increase in difficulty as time progresses. Specifically, HFI tokens will become scarcer as this campaign continues. In turn, these actions create more incentive for users to HODL their HFI.

Vault Staking

The second form of staking found in the HFI ecosystem is vault staking. This protocol is only conducted twice a year, and rewards for users are 0.1 HFI or 10% of monthly interest until the total of 25 HFI per Vault staking event is minted. In total, 200 HFI or 20% of the total supply of HFI tokens are set to be minted during these Vault staking campaigns. This strategy equates to a fixed minting rate of 10% per month per vault.

HFI – HODLers Can Now Enjoy Ethereum's Ecosystem

HFI offers a refreshing perspective to the endless token issuances seen in the market today. When you look at the sector's long-term aspects, it is evident that only the platforms with proper deflationary protocols and scarcity will remain active in the coming years. Of these, HFI appears to have carved out its lane in the market.