Editor's Note: This article comes fromHoneycomb Finance News (ID: fengchao-caijing), Author: Kyle, reproduced by Odaily with authorization.
Editor's Note: This article comes from
Honeycomb Finance News (ID: fengchao-caijing)
Honeycomb Finance News (ID: fengchao-caijing)
, Author: Kyle, reproduced by Odaily with authorization.
After being suspended for more than 1 month, the Yam project completed the resurrection plan together with the community. On September 19, "Sweet Potato" came back with new farmland.
Against the background of other people's prosperity, the once pioneering project Yam is no longer the same as before. As of September 21, the value of Yam's lock-up volume did not exceed US$25.9 million, which pales in comparison to the lock-up value of more than US$500 million at its peak on August 12.
There are all kinds of new "farmlands", and users like the new and dislike the old. These market phenomena are the reasons for Yam's "cold reception". More importantly, as the number of DeFi participants increases, the early dividends are wiped out. At present, whether it is the popular fried chicken project Sushi or the pioneer of liquidity mining Compound, the rate of return of mining is lower than that of the bright moment more than 90%.
In the post-DeFi era, how the assets in the application accumulate value will eventually bring application developers back to the reality that they must think about sustainability.
secondary title
YAM V3 excavation "sweet potato" is not popular
On September 19, Yam Finance, which had been suspended for more than a month, finally started mining again. Currently, only the YAM/yUSD Uniswap LP pool has been opened, and users can continue to cultivate "sweet potatoes" by mortgaging relevant market-making certificates.
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New Version of Sweet Potato Farming Page
Among them, yUSD is a smart asset issued by Yearn and backed by a basket of stablecoins. It can automatically obtain income from DeFi protocols such as Aave, Compound, and Curve, and is known as a stablecoin that can "automatically make money".
Compared with LP pools such as YAM/COMP launched when Yam was first launched, yUSD has a more stable price, which reduces the risk of impermanent losses to a certain extent.
According to the official introduction, there are a total of about 925,000 YAM rewards in the YAM / yUSD Uniswap LP pool. 92,500 YAM will be distributed in the first week, and thereafter will be reduced by 10% every week. Trent Elmore, the core developer of Yam, said that liquidity mining is just a way to fairly distribute tokens to the community. The initial liquidity mining task has been completed, so there is no need to add additional pools to allow more communities to enter.
The day before the start of mining, Yam launched the token migration plan. The YAMv2 tokens held by users during the protocol transition period can be exchanged for YAMv3 through the official website 1:1; 50% of the new coins obtained can be redeemed immediately, and the other 50% Will be released consecutively over 30 days. There is no deadline set for this redemption.
At 6:30 pm on September 19th, Beijing time, Gate.io exchange launched YAMv3. The token opened at $18 and rose to $38.99 at the highest. As of 3:00 pm on September 21, YAMv3 was quoted at $23.2, which was 28.88% higher than the opening price and 40.49% lower than the highest point.
As a pioneer in the DeFi mining trend, Yam became well-known in mid-August, and then collapsed due to loopholes. Now it is back with a comeback, but the market has changed drastically.
Ten days later, the unwilling Yam community launched the 2.0 plan to migrate YAMv1 tokens to YAMv2 and enter the transitional stage of proposals and voting.
However, in the context of a market where new DeFi projects are emerging in an endless stream and the growth cycle is getting shorter and shorter, Yam3.0 has lost its former aura. From the project being stranded to the official restart, it took more than a month. During this period, people in the currency circle took turns making "sushi", "hamburger", and "salmon", planting the "sun" and chasing the "moon". Even the old protocol Uniswap issued the governance token UNI.
During this month, members of the Yam community also saw clearly in their anxiety. On Aug. 26, a core community member pointed out that market cycles change so rapidly that the longer a project takes to deliver, the older it becomes.
Although the "resurrection version" of Yam finally came out on September 19th and passed the security audit of the blockchain security company PeckShield, the market attention it has received is no longer what it used to be. One indicator is that the YAM/yUSD LP pool is currently the only "sweet potato field", and the total liquidity of this trading pair on Uniswap is about 25.9 million US dollars, which is completely incomparable with when Yam was first born. "Sweet potato" is no longer red.
DeFi revenues drop and the market enters a cooling-off period
If you take a long look, it is not difficult to find that Yam's fall from favor is not just because there are too many "farmlands". One of the most prominent market phenomena is that the rate of return for digging "sweet potatoes" has dropped significantly compared to before.
On September 21, in the YAM/yUSD liquidity pool on Uniswap, there were a total of 583,400 YAM and equivalent yUSD. If all these liquidity are used for mining, based on the total amount of 92,500 YAM in the first week, the daily yield of mining in the first week is about 1.13% (calculation method: (9.25/7)/(58.34*2 )*100%); Moreover, the weekly output of YAM will decrease in the future, and the mining rate of return will further decrease.
When the first Yam mine was opened before, the highest daily rate of return exceeded 50%, which is almost 50 times the current rate of return. With the sharp drop in yield and the market giving users more mining options, it is not surprising that Yam did not continue the legend.
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There are 583,400 YAM in the YAM/yUSD liquidity pool
It's not just Yam. With the advancement of the DeFi "farming era", the income of most DeFi protocols is decreasing.
Projects such as SushiSwap (sushi) and Kimchi (kimchi), which used to have the highest annualized rate of return of 30,000%, have seen their current rate of return shrink by more than 90%; The rate is less than 10%.
Generally speaking, the "first mine" where a small number of people participate, because the mining efficiency is higher, the rate of return will be higher. As the number of participants increases and the value of mined tokens stabilizes, the mining yield of DeFi protocols gradually falls, and the market begins to enter a cooling-off period.
“It’s obvious that the popularity of DeFi has cooled down,” senior DeFi player Luo Li (pseudonym) told Honeycomb Finance. At the craziest time in August, five or six new projects would be launched every day, with annualized income of several thousand percent.” Tokens were speculated very high, and later, most of the tokens fell miserably, and many users who rushed in lost money, and now the frequency of new projects is reduced, and the market is not so crazy.”
Luo Li believes that after mining, you can’t rush forward without thinking. You need to see whether the mined coins are useful. After all, mining not only has to pay the cost of handling fees, but also has to bear the risk of impermanent losses. “Coins without value support , it is rarely dug now.”
