The newest high-performance food-flavored DeFi meme project, Hotdog appears to have crashed and burned within hours of its release.
The newly cloned DeFi protocol is called Hotdog promised insane returns of up to a million percent APY to attract liquidity providers. It’s another double of the popular Uniswap token liquidity and exchange platform and follows in the footsteps of the recently launched sushi and kimchi platforms.
HotdogSwap launched on September 2nd and offers a largely illiquid token that has soared in price to over $ 5,000. According to Uniswap’s Analytics dashboard Uniswap.info. According to the HotdogSwap panel This token is now worth $ 0.0332 at press time.
A Reddit post shows how the coupon went from $ 4,000 to $ 1 in just five minutes. Twitter users such as “lowstrife” and “Ivan on Tech” have reported the enormous decline.
From USD 4000 to USD 1 in 5 minutes.
Can you stop trading? pic.twitter.com/cZRTBfyJj3?
– Lowstrife (@lowstrife) 2nd September 2020
The dealer Edward Morra compared the fall to BitconnectIt posts examples of other fake DeFi tokens that have fallen in the past 24 hours.
Man, I swear this market condition is worse than Bitconnect. This just happened today, dozens more examples in the last month pic.twitter.com/tG9Yl0RhZT
– Edward Morra (@edwardmorra_btc) 2nd September 2020
Like sushi, With Hotdog, liquidity providers were able to deposit tokens from the Uniswap liquidity pool in order to earn HOTDOG tokensThis gave users the right to continue to earn part of the log fee accumulated in the token even if the liquidity reserve was withdrawn.
This cloned crop farming madness was sparked by Yam Finance, a YFI clone who first offered pools of liquidity by rewarding vendors with the idea of 100% community owned tokens.. This opened the door for other imitators of existing DeFi protocols like Uniswap to launch their own websites and generate their own meme tokens, which are often food-themed and offered as rewards.
Anyone can list a token at Uniswap so that the market there is created by providing the new token and some ETH for the initial liquidity. In her latest Defiant newsletter, industry expert Camila Russo adds:
“By controlling the offer of ETH in relation to the token, you can also set an inflated price for a highly illiquid token.”
DeFi traders flocking to these crazy new high yield bid projects are referred to as degenerate or “degenerate” farmers.. Initially, they increase the prices of the tokens, which also increases the yield. Cashing in quickly, as seems to be the case with Hotdog, brings huge profits for a select few while the rest burns. Many compare the projects with Ponzi schemes or with pomps and downloads.