🔎 Relationship between token price and APR | $HUMA
When a protocol increases the APR (annual yield) in staking or liquidity pools, it is usually an incentive to attract liquidity and retain holders.
If the price of the HUMA token drops, offering a higher APR can compensate investors for the risk and thus discourage massive selling.
This mechanism does not necessarily stop the price drop in the short term, but it can help stabilize the market if it attracts enough capital.
⚖️ What may be happening with HUMA
1. Price drop → This may be due to sales from initial holders, traders taking profits, or general downward pressure in the crypto market.
2. Increase of APR to 18.67% → Probably the protocol adjusted the rewards to make HUMA staking more attractive, incentivizing tokens to be locked instead of sold.
3. Desired effect → Reduce circulating liquidity of HUMA on exchanges (floating supply) and give a signal of confidence to the community.
📌 Is there a desire to prevent further decline?
Yes, it is a common strategy in DeFi: increase the APR to retain investors when the token is under downward pressure.