“Buffet” is strictly prohibited from extravagance! Is liquidity mining going to be a “CD”?


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Since the “uncle” surged, DeFi was like a chicken blood, and tokens named after food began to gush out. What sweet potato (YAM), sushi (SUSHI), kimchi (KIMCHI), radish (CRT), pasta (PASTA), salmon (SAL), etc. have appeared one after another. But the question is how long can the DeFi feast last, and how should the chicken feathers after this feast end?

With the popularity of DeFi liquid mining projects, various tokens named after food began to emerge in the coin circle, sweet potato (YAM), sushi (SUSHI), kimchi (KIMCHI), radish (CRT), pasta (PASTA) , Salmon (SAL), the entire coin circle seems to have begun a buffet feast.

But this liquid mining buffet didn’t take long before it started, and it seems to be about to end. During this weekend, the currency prices of multiple DeFi liquidity projects fell by more than 30%.

The start of this buffet did not start with “food”. In June this year, the launch of Compound started a wave of liquid mining.

What is liquid mining? Liquidity mining is to obtain income by providing liquidity for DeFi products on Ethereum. In simple terms, mining can be carried out by depositing certain token assets.

In July, the emergence of YFI pushed liquidity mining to a higher tide. YFI has no pre-mining, no crowdfunding, no team allocation, no investment institution reservations, and completely adopts an online governance model, which is completely distributed to users who provide liquidity through liquidity mining.

This relatively fair and open token distribution model has even been compared by some users to Bitcoin in DeFi. The emergence of YFI allowed the entire currency circle to see the miracle of 0 to 800 million in just over 40 days.

In August, the first dish of the “buffet” came-sweet potato (YAM). YAM combines AMPL+YFI, which uses both AMPL’s flexible supply mechanism and YFI’s distribution mechanism.

On the first day of YAM’s launch, the market value of the market has reached 57 million US dollars. YAM failed after only 37 hours of birth because of a bug in its supply code. Although YAM V2 is still coming aggressively, it has sounded a risk alarm for the hot liquidity mining.

The start of this “buffet” was not smooth.

At the end of August, Uniswap branched out from SushiSwap, the biggest main course of this buffet-Sushi (SUSHI). SushiSwap adds a token incentive mechanism based on Uniswap.

It has opened more than ten liquidity mining pools. Users can “make sushi” by providing liquidity to designated trading pairs in Uniswap and pledge their liquidity certificates to SushiSwap. In a period of time, the annualized rate of return has even reached more than 2000%.

SUSHI’s high profits have resulted in a variety of imitation dishes. Kimchi (KIMCHI), radish (CRT), pasta (PASTA) and salmon (SAL) have successively landed on this “buffet” table. The “buffet” feast also attracted a climax.

But at this time, when people were happily looking at kimchi (KIMCHI), holding pasta (PASTA), radish (CRT), and thinking about the next bite of salmon (SAL) at the banquet, But I found that the sushi (SUSHI) in my mouth was stuffed with leeks!

The chef at the side of Sushi (SUSHI) quietly cleaned up his own kitchenware, took his salary and left the unfinished “buffet” feast.

On the evening of September 5th, Chef Nomi, the anonymous founder and lead developer of SushiSwap, has exchanged part of the sushi tokens allocated to develop the SushiSwap ecosystem into 17,971 ETH. After that, the price of sushi (SUSHI) began to plummet, falling by more than 50% 24 hours ago.

This “buffet” feast is full of imitation plates, but how much is really valuable? How many have been audited? How many have white papers?

The founder of SushiSwap cashed out by Stone Hammer, giving the liquid mining project the final blow. This weekend, the currency prices of multiple DeFi liquidity projects have fallen by more than 30%.

There is an old saying in the currency circle that “you are losing money if you don’t make money”, and DeFi is also in this trend now. But the lesson must not be forgotten. Behind this high return is high risk. How to balance return and risk is particularly important. The country now advocates food conservation and prohibits extravagance and waste. Has this “buffet” come to an end?