Mercenary Capital

Mercenary capital is money that is committed to a project purely for short-term rewards, with no loyalty to the project itself, and that leaves as soon as better returns appear elsewhere. The term is widely used in DeFi, where protocols attract deposits through liquidity mining or yield farming rewards. Large holders and automated strategies move funds into whichever pool pays the most, sell the reward tokens straight away and withdraw when incentives shrink, which can cause sudden drops in total value locked and steady selling pressure on the protocol's token. Points programmes and airdrops attract similar behaviour, often called farming. In venture investing, the phrase describes investors who back a start-up only for a quick gain and offer little support. Projects try to attract "sticky" capital with lock-ups, vesting and rewards tied to long-term use.