2026-01-05 05:22:02

There is a classic case in history called the "Cobra Bounty Program." During the British colonial period in India, the government announced a bounty based on the number of cobras killed to address the problem of cobra overpopulation. What happened next? Local people started breeding cobras on a large scale to earn the bounty. The program ultimately failed—after the government canceled the bounty, those breeders simply released the snakes.

This story reveals the core trap in incentive mechanism design. When rewards are decoupled from genuine goals, participants will optimize for the wrong outcomes. Similar reverse incentives are constantly playing out in financial markets, DeFi protocols, and even trading mining. Policy makers always underestimate the creativity and execution power of market participants.

A high-trust society requires not only rules themselves but also the deep thinking of designers regarding the incentive chain.

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LiquidatedAgain

· 01-08 01:41

Fuck, this is how DeFi lending rates are designed. Once the collateral ratio relaxes, the liquidation price starts to wildly leverage up, and in the end, the last liquidation results in a total loss.

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AltcoinHunter

· 01-07 23:33

Damn, isn't this just the current state of most DeFi mining? Crazy token printing to boost incentives, then it's over in a quarter.

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StableNomad

· 01-07 14:16

ngl this cobra bounty thing is literally every yield farming program that's blown up in the past five years. reminds me of UST in May—government removes incentive, bags everywhere. market participants aren't stupid, they're just optimizing for what actually pays. statistically speaking, 99% of tokenomics designs miss this exact problem.

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GasGrillMaster

· 01-05 05:51

Oh my, this is why I never trust airdrop designs... A bunch of people really mess up the entire system just for a little benefit --- So DeFi now has so many rug pulls, ultimately it's because the incentive mechanisms are completely broken --- The case of the cobra was truly incredible. Isn't all this "innovation" in on-chain mining just the same? --- Wait, why is this logic so hard for people to understand? Every time there's a new protocol, it has to be repeated --- After canceling the bounty, they just release the snake haha. Isn't this the real situation of some project teams? --- Deep thinking? Ha, most protocol designers don't even want to think seriously --- Decoupling incentives = market failure, this principle applies everywhere --- The story of reverse incentives has been told a hundred times, but people still keep falling into the trap --- So I say the biggest taboo in designing mechanisms is creating arbitrage opportunities. And what happened? --- Who the hell came up with the snake head bounty? Truly incredible

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GasFeeGazer

· 01-05 05:51

Wow, isn't this just a microcosm of crypto mining? Still pretending with a different disguise.

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QuietlyStaking

· 01-05 05:43

That's why so many mining projects ultimately end up as snake farms, really.

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TradFiRefugee

· 01-05 05:30

Isn't this the current state of DeFi mining? Tokens are launched and rapidly self-replicate, and as soon as rules change, they run away directly.

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MechanicalMartel

· 01-05 05:26

That's why so many mining projects ultimately fail; the people designing the incentive mechanisms never considered how clever users could be at exploiting loopholes.

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