It’s a competition, i.e. only one of the services they eventually intend to offer.
The tokens have value because there are prizes: “But of course, since it’s a competition, there are prizes to be won — users can trade their way onto the ROI Leaderboard for a share of the competition prize pool.”
Prizes are financed via the interest gained by lending away the UDSC for the duration of the competition (just as if Hedgehog were acting as a classical bank, I suppose): “Thanks to DeFi composability, Hedgehog can direct the USDC staked by users towards a Solana lending protocol for the duration of the competition. All of the yield generated from these deposits goes back to users in the form of competition prize pools.”
The linked post ends with a full page of disclaimers.
With regards to locking up USDC: I’ve only just started reading up on Ethereum (e.g. this post), but from my very rudimentary understanding, I suppose the point here is that USDC is a stablecoin pegged to the price of 1 USD, so locking up USDC does not expose you to the same volatility as would happen if you locked up the equivalent amount of ETH instead.
From reading further through the Hedgehog Markets link:
It’s a competition, i.e. only one of the services they eventually intend to offer.
The tokens have value because there are prizes: “But of course, since it’s a competition, there are prizes to be won — users can trade their way onto the ROI Leaderboard for a share of the competition prize pool.”
Prizes are financed via the interest gained by lending away the UDSC for the duration of the competition (just as if Hedgehog were acting as a classical bank, I suppose): “Thanks to DeFi composability, Hedgehog can direct the USDC staked by users towards a Solana lending protocol for the duration of the competition. All of the yield generated from these deposits goes back to users in the form of competition prize pools.”
The linked post ends with a full page of disclaimers.
With regards to locking up USDC: I’ve only just started reading up on Ethereum (e.g. this post), but from my very rudimentary understanding, I suppose the point here is that USDC is a stablecoin pegged to the price of 1 USD, so locking up USDC does not expose you to the same volatility as would happen if you locked up the equivalent amount of ETH instead.