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Problems with CD implementations
HEX was the first crypto token to implement the CD idea using smart contracts on the Ethereum network in Q4 2019. A year later, Wise Token implemented a similar version of CD staking.
However, there are several problems with these implementations:
  1. 1.
    Fixed Inflation: Inflation is ~4% per year, which gives you a floating APR depending on how many people stake in the system. If you staked today, you can't be sure that today's APR will remain the same after a year or later. If more people staked it will reduce the APR for everyone.
  2. 2.
    Only Ethereum Network: Staking is only available on the Ethereum network, which creates a barrier to entry for new people because of expensive network fees.
  3. 3.
    Disabled Stake Transfers: In Hex or Wise Token, you can't transfer your stakes to someone else.
  4. 4.
    Bigger Pays Better: Incentivizes whales as they pay higher interest rates for larger stakes.
  5. 5.
    No Scraping of Rewards: In Hex, you cannot scrape your interest; however, Wise Token has added this feature.
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