However, it needn’t continue forever, says Purdy, just long enough to reach its intended goal.

“After a while, the liquidity pool reaches a critical mass to where it can function on its own, so in the case of COMP, four years of liquidity mining should be long enough to when it eventually runs out. It’s a massive lending pool where users want to leave their capital because of its size and network effects rather than the COMP rewards” Purdy explained to Decrypt. 

Using this technique, emerging Defi protocols have successfully managed to galvanize extreme growth in a short period. And when the rewards do run out, these pools expect to stand on their own. That is, as long as everyone doesn’t jump ship for a different crypto gold rush.