You have made some really good points... In my opinion, it all depends on the project and what it is all about, the solution it brings as there can be strong arguments for both high APYs and low APYs... High APYs rewards has its own benefits as it would definitely attract more users who will be willing to lock their tokens to benefit from the high APY especially if the DeFi project has a lot to offer and has shown to have growth potential. However, the downside to it is that it can lead to more dumps in the market which can drive the price of the token down quickly. In my opinion, having a balance between good APY rewards to attract more users to lock their assets and take it out of circulation, and also preventing users from dumping due to excess supply.