Editor’s note: Still know a little about many projects in the DeFi world? It’s time to get a good understanding of the principles and logic behind its design.
On September 17, Uniswap, the number one decentralized trading platform, launched its protocol governance token, UNI, and started initial liquidity mining at 12:00 AM on September 18. Airdrop tokens to old users and join the yeild farming “movement”. Uniswap will once again push the dispute over liquidity mining to a climax.
Mobile mining is called “yeild farming” in foreign communities, and agricultural farming. Players of liquid mining are called “farmers”, and farmers obtain “harvest” (i.e. various tokens) through “farming” (i.e. mortgage digital assets).
A few months ago, in mid-June 2020, Compound ignited the flames of “liquid mining” with relays such as yearn finance and sushiswap. So far, the DeFi sector has been hot for several months. Under the effect of waves of sudden wealth, mobile farmers have become the most enviable profession today, and the effects of asset flow and aggregation are very rapid and obvious. As of September 16, 2020, the DeFi lock-up scale is 8.91 billion U.S. dollars and the market value is 14.1 billion U.S. dollars.
Nowadays, a new project in three days is already the normal state of DeFi. In addition to the uncle series, sushi, grapes, sake, pickles… all kinds of dazzling project names have propped up the enthusiastic market for liquid mining. On the one hand, the ultra-high annualized rate of return and excellent community governance have attracted many miners to mine all night; on the other hand, the hype value of tokens has attracted many retail investors to rush into the secondary market to invest.
DeFi is refreshing people’s cognition at a speed beyond expectations. There are still many people who want to catch up with the “wealth train”. However, due to the high operating threshold of DeFi mining, the information is too fragmented, and they truly understand these projects and understand liquidity. There are very few users of the mining process, and they can only “hope for money”. Therefore, this article will take stock and interpretation of several major liquidity mining projects currently on the market to help investors quickly grasp basic information.
One, Yearn Finance
1. What is yearn finance?
Yearn Finance is a decentralized lending aggregator built on the Ethereum blockchain. YFI is a governance token launched by year.finance. The total supply is 30,000. There is no pre-mining, no crowdfunding, and no team allocation. , There is no investment institution reserved, and the online governance model is completely adopted, and all are distributed to users who provide liquidity through liquidity mining.
As a lending aggregator, yearn finance integrates mainstream lending platforms such as Aave, Curve, Compound, Synthetix, Dydx and other protocols to optimize users’ lending income. Users can mortgage DAI, USDC, TUSD, USDT and other stable coins to earn passive income. The platform will automatically allocate funds to the current agreement with the highest yield, and yearn will give users a proof of equity called yToken. Users can pass ytoken Take out the tokens you originally deposited and the corresponding income, and you can also deposit into y.curve.fi (a stable currency exchange pool launched by the yearn and Curve cooperation) to earn market-making income. (Official website:)
2. How to get YFI tokens?
Since YFI has no pre-mining, no crowdfunding, and is mainly distributed through liquid mining, the only way for users to obtain the initial issuance of tokens is to become a liquid miner in a pool of yEarn. At present, there are three liquidity mining pools in year finance, namely yPool on curve, YFI-DAI pool on balancer and YFI-yCRV pool.
1) Curve pool. First deposit stablecoins in yPool() of Curve.fi, you will get yCRV (Curve iearn LP Tokens), put yCRV in ygov.finance to pledge to earn YFI.
2) YFI-DAI pool. First, you need to be a liquidity provider for the 98% DAI 2% YFI Balancer pool. Find the corresponding pool on Balancer and choose Add Liquidity. After you mortgage DAI, you will get BPT (98% DAI 2% YFI) tokens. With BPT tokens, you can put them in ygov.finance China to earn YFI. (Note: Currently, the first two ponds have been dug out.)
3) YFI-yCRV pool. The third mining pool needs to pledge 98% yCRV and 2% YFI on Balancer to obtain BPT tokens, and then pledge the Balancer fund pool token BPT to ygov.finance to earn YFI.
Mining diagram of YFI-yCRV pool
3. yfii.finance
(1) What is yfii.finance?
yfii.finance is the domestic version of “yearn” (YFII is its protocol governance token). It is also a loan aggregator and a fork project of year finance, which originated from the YFI project’s No. 8 proposal. Since the total number of YFIs was only 30,000, the core developers of the community put forward a proposal for additional issuance, but ultimately failed to pass. In order to prevent the community from being controlled by the whale account, the Chinese community
Some of the main community members forked the Year Finance project, founded YFII, and operated it independently. At the beginning of its birth, YFII was once not favored by people, but now it seems that the YFII community has proven itself to the market with strong product innovation. (Official website:)
Like YFI, YFII has no pre-mining, no crowdfunding, and no founder rewards. It can only be obtained by mining by providing stable currency liquidity for YFII. YFII has community governance functions and integrates mining revenue from various DeFi platforms. As a follow-up project income distribution, participation in community governance use, has the right to vote in YFII DAO.
Compared with YFI, YFII has raised the upper limit of the total amount and added a halving increase mechanism similar to Bitcoin, which is considered to have a fairer distribution plan. The total amount of YFII is 40,000, and the output is halved every 7 days, and the distribution is completed in 10 weeks. The corresponding proportion of YFII is allocated according to the share of liquidity provided by DeFi users for each pool. This distribution scheme is also considered fairer and more community-based.
In addition, compared to YFI’s multi-signature method, YFII adopts a more radical and DeFi principle of destroying additional issuance permissions, and 3% of the profit is used to repurchase and destroy part of YFII. At present, the token additional issuance permissions have been destroyed by transferring the permissions to 0x0 . (The detailed comparison of YFI&YFII is shown in the chart below)
Comparison of YFI and YFII’s token distribution and mining mechanism
(2) How to obtain YFII by mining?
YFII currently has three mining methods: its own original distribution pool pool1 and pool2, and machine gun pool (vault) mining.
1) Pool1: Rewards for mining YFII through mortgage stablecoin yCRV. Like YFI, you first need to enter the yPool() of Curve.fi and deposit USDT/DAI/USDC/TUSD to exchange for yCRV; put yCRV into the pool1 pledge of yfii.finance() to mine YFII.
Features: No loss of principal, zero lapping, but low return rate due to large numbers of people
Income calculator:
2) Pool2: Provide liquidity in the Balancer through the 98% DAI 2% YFII pool to obtain BPT rewards, and then mortgage BPT to mine YFII. After entering the page, you can see your BPT balance, select Stake Tokens, click on the balance above the input box to automatically fill in the pledge amount, click on the mortgage token, pay the gas fee, and you can successfully start mining.
Features: There may be impermanent losses (according to the ratio of 2:98, when YFII drops 50%, the principal begins to lose money, when YFII drops 90%, the principal loses about 10%)
3) Vault machine gun pool mining: YFII Vault is a smart contract that automatically configures the best DeFi mining revenue in the market. Users only need to deposit the corresponding currency into the Vault to get the highest DeFi mining revenue in the market without any contract operations.
First access your wallet on the official website, click on the machine gun pool () page, select a currency, such as yCRV, click the red arrow, enter the amount or percentage of pledge, and click Authorize to start mining successfully. (It can be extracted on the right side of the same interface)
Currently supports USDT, USDC, DAI, TUSD, WETH, yCRV and other currency mining
Features: Convenient operation, guarantee the safety of the principal, and sustainable.
Earnings expectations: The dynamic change of the yield depends on the yield of existing mining projects in the market.
Note: No matter which liquidity pool you are participating in, you need to prepare your wallet (Metamask browser plug-in wallet is recommended), stable currency (at least one of DAI, USDC, USDT, TUSD) and ETH (used to Pay the gas fee).
Three, SushiSwap
(1) What are Sushiswap and SUSHI?
SushiSwap is a decentralized cryptocurrency exchange built on Ethereum. It is a fork project of Uniswap v2, initiated by an anonymous developer named Chef Nomi. (After selling the SUSHI cash-out event, Chef Nomi transferred the project control to FTX CEO Sam Bankman-Fried).
SushiSwap introduced a governance token called SUSHI on the basis of Uniswap, and launched liquid mining before Uniswap. SUSHI is mainly used to reward people who provide liquidity for the agreement, and can be used for agreement governance. Holders of Uniswap LP tokens can obtain SUSHI tokens by putting these LP tokens in the corresponding initial fund pool list of Sushiswap to provide liquidity. Among them, the highest rate of return in the fund pool is the “Sushi Pool”-SUSHI-ETH. Staking in this pool will get an extra 2 times SUSHI reward.
(2) How to mine SUSHI?
Provide liquidity for Sushiswap’s exchange fund pool and obtain SUSHI tokens. The specific steps are as follows:
Log in to Uniswap official website (), click unlock wallet to connect to the wallet (metamask, etc.); click Menu to enter, take SUSHI-ETH SLP token as an example (other SLP token operations are the same as SUSHI-ETH SLP);
Choose to enter, approve the deposit into the MasterChef contract, and it is complete.
If you don’t have SUSHI-ETH SLP tokens, you need to provide liquidity to the Sushiswap Sushi-ETH fund pool to get it. Click Exchange, select Add Liquidity, buy Sushi (Sushi contract address: 0x6b3595068778dd592e39a122f4f5a5cf09c90fe2), add Sushi-ETH liquidity according to the current ratio, and you will get SUSHI-ETH SLP tokens after confirmation.
After Sushiswap completed its liquidity migration, 80%-90% of its liquidity was taken away from Uniswap. This is where Sushi was very pleasant from the beginning. But from the perspective of transaction volume and liquidity, Uniswap’s current performance is still better than SushiSwap.
Four, Uniswap
Uniswap is a very old decentralized trading platform. On September 17, Uniswap issued the protocol governance token UNI, and on September 18, it launched a liquidity mining plan. The total circulation of UNI is 1 billion, all of which will be released within 4 years.
Liquidity mining: a total of 5 million pieces, after 2 months (as of November 17), four trading pairs of ETH/USDT, ETH/USDC, ETH/DAI and ETH/WBTC are mined, each trading pair is daily Can dig 83,300 UNI.
Compare the differences between Uniswap and SushiSwap: 1. In Uniswap, LPs can earn 0.3% of transaction fees in any pool, and these fees are proportionally distributed to all LPs in each pool; SushiSwap introduces procedures The fee is commissioned, of which LP only earns 0.25%, and the remaining 0.05% is used to repurchase SUSHI, which is then distributed to all SUSHI holders in proportion.
2. With Uniswap, the liquidity provider earns the transaction fee of the fund pool only when it provides liquidity. Once they withdraw their own funds in the fund pool, they will no longer receive the corresponding income; and SushiSwap, even if you decide to no longer provide liquidity, those SUSHI tokens will also give you the right to continue to earn part of the transaction fees of the SUSHI agreement.
3. In terms of liquidity mining, in Uniswap, the more liquidity is provided, the more transaction fee sharing is obtained from the fund pool. But as the pool grows, the rewards of small liquidity providers will be diluted; on the contrary, early adopters of the SushiSwap agreement will get 10 times the SUSHI of those who join the agreement later. Even if early adopters stop providing liquidity to the pool, this SUSHI can be used to get a share of transaction fees from all pools.
Five, Swerve
Swerve() is a fork project of Curve. It went online on September 5 and launched liquidity mining. The method of mining is to mortgage any currency of DAI, USDT, USDC, TUSD through the stable currency exchange pool of swUSD. Obtain swUSD, and then on the DAO governance page, mortgage swUSD for liquidity mining to obtain SWRV.
The way Swerve forks Curve is similar to the way Sushi forks Uniswap, both of which are competitive. The reason for the decision to fork is mainly because some users are not very satisfied with some of Curve’s management systems. For example, Curve is highly inflationary, and the daily supply will increase by about 2 million CRV (about 4 million US dollars); in addition, Curve only 62% of the supply is allocated to LP. Swerve decided to allocate all the supply to LP, all tokens will be distributed within 6 years, while Curve will take decades.
SWRV is the governance token of Swerve, with a total circulation of 33 million. There is no pre-mining and private placement, and it is completely owned by the community. The total mining time is 6 years. It is currently in the first phase. It also belongs to stablecoin mining, and there is no risk of cost loss, but because it fails the audit, there is a possibility of loopholes.
Six, SakeSwap
Popularly known as “sake”, it is also a decentralized trading platform. Compared with Sushiswap and Uniswap, Sakeswap has higher incentive efficiency, which is mainly manifested in two aspects: the introduction of a deflation model; and the capture of trading slippage.
The constant product transaction curve mechanism adopted by Uniswap is difficult to solve the slippage problem of stablecoins. However, SUSHI directly forks the Uniswap mechanism and does not solve the slippage problem of stablecoins. Miners can arbitrage through transactions.
Therefore, SakeSwap has several innovations in product design: 1. Use 0.05% of the fee income to buy back tokens (70% of which are allocated to the mortgager of SAKE tokens, and 30% of SAKE tokens will be destroyed). In addition, stable 0.3% of the currency transaction fee is also used to purchase SAKE tokens for destruction. 2. Reduce slippage. Unlike traditional DEX arbitrage trading, which eats up trading slippage arbitrage, Sakeswap adopts an automatic trading slippage capture mode, and 50% of the slippage income will be allocated to the liquidity provider. 3. In terms of mining design, UNI and SAKE dual mining will be supported soon, and transaction mining (the second phase started) will be launched on the basis of liquid mining. Transaction mining not only rewards LP, but also rewards transaction behavior itself.
It is currently in the liquidity mining stage (Phase 1), with a total of 111,750,000 SAKE tokens issued, and 100 SAKE tokens are mined in each block by default. There are three main ways of mining: mortgage Uniswap LP Token to obtain SAKE tokens, mortgage SUSHI LP Token to obtain SAKE tokens, mortgage Sake LP Token to obtain UNI tokens and SAKE token dual mining.
