Rabbithole Relaunches to Reward Long Term DeFi Capital

Rabbithole is shaking up its strategy with a transition to an Onchain Retention marketplace. After becoming well known for its questing model, the platform now aims to fix the issue of short term liquidity in decentralized finance. The goal is to move away from rewarding one time actions that lead to quick capital exits once payouts end.

The new system streams rewards to users based on the duration and size of their committed capital. By shifting the focus from quick clicks to long term holding, protocols can effectively filter out bots and temporary farmers. The team refers to these loyal users as Residents, aiming to incentivize those who provide stable, consistent liquidity.

This update is designed to make protocol spending more efficient by rewarding behaviors that actually add value to the ecosystem. CEO Matt Grunwald noted that previous incentive structures often rewarded the wrong activity, leading to capital flight. By aligning rewards with time spent in a protocol, the platform hopes to create a more sustainable environment for DeFi projects.

Interested users can sign up now for early access ahead of the full launch in August. The rollout follows several successful tests with partner protocols, applying lessons learned about wallet quality and user retention to the wider market.