BOMBASTUS53
Sir, please read the messages above on how high APY is irrelevant to growth of investment. Neither is the price.
High APY --> Increased supply of KLIMA --> Reduced runway --> Bad for KLIMA protocol long term health.
For now, let's assume we've a good runway. Let's compare
Your KLIMA: 10
Supply: 1mil KLIMA
Price: $100
Current Market Cap: $100m (Supply x Price)
Investment value: $1000 (# of KLIMA x Price)
Target Market Cap: $10b (in 1 yr)
APY: 10,000%
Your KLIMA: 1000 (approx) - 100X
Supply: 100mil KLIMA - 100X
Current Market Cap: $10b (set target)
Price: $100 ( Price = Market Cap / Supply)
Investment Value = $100 x 1000 = $100,000
Alternative: (for the same $10b market cap in 1 yr)
APY: 1,000%
Your KLIMA: 100 (approx) - 10X
Supply: 10mil KLIMA - 10X
Current Market Cap: $10b (set target)
Price: $1000 ( Price = Market Cap / Supply)
Investment Value = $1000 x 100 = $100,000
In both cases, your investment value has grown from $1000 to $100,000. But if the APY is 10,000%, the protocol has increased the supply to 100mil KLIMA instead of only 10mil KLIMA. This dilution would reduce the runway over those 12 months.
The key is market cap. For the same market cap, KLIMA will have a higher price for reduced supply (reduced APY).
Lower APY --> reduced KLIMA emissions --> Slower rate of supply of KLIMA --> Increased runway --> Better for protocol --> Better control over bonding metrics --> Controlled treasury growth