You see a protocol offering 52 % APY on stables. You know it’s probably unsustainable. You deposit anyway for two weeks. Congratulations, present bias just hijacked your future self. Present bias: we overweight immediate rewards and brutally discount future consequences. In DeFi it shows up as: “100 % APY today feels better than 12 % forever, even if the 100 % lasts 11 days and then rugs.” The math is brutal (52 % APY, daily compounding) $10k for 11days = ~$10,127 total (+$127 profit), then 80% rugged $10k at 12% for one year = $1200, still there next Christmas. Only antidote I’ve found: force a 72hour wait rule on any yield > 25 %. By the time the timer ends, the protocol usually implodes or you come to your senses. Either way, your future self sends a "thank you" note.
- 0 replies
- 0 recasts
- 0 reactions
FOMO is expensive. The average user would 3x - 4× their wealth by doing literally nothing for 12 months.
- 0 replies
- 0 recasts
- 0 reactions