Mercenary Strategy Identification

In DeFi, some users adopt mercenary strategies, prioritizing short-term profits over long-term commitment to a protocol. These users often engage in behaviors that are net negative to and reduce the effectiveness of reward programs. OpenBlock Labs helps identify these mercenary tactics and adjust incentives accordingly.

Methodology

OpenBlock's approach to identifying mercenary strategies begins with analyzing user behavior patterns that indicate a focus on profit maximization—such as frequent arbitrage trading or moving liquidity to chase the highest APRs across protocols. These behaviors often signal users who are not invested in the long-term success of the protocol but rather in short-term gains.

Once we identify these patterns, we can adjust the reward structures to avoid incentivizing transient users. By recognizing mercenary strategies, we can optimize reward programs to ensure they attract and retain users who add real, lasting value to the ecosystem/protocol.