The trend towards incentives for use in decentralized financing began with the distribution of COMP tokens by compound. and further through various other platforms that They tried to repeat their perceived success.
But DeFi’s recent delusion of performance cultivation affects yEarn, A performance aggregation platform developed by one man, Andre Cronje. Despite his warnings that The platform token YFI has no value and “will not be in Uniswap”. In fact, it was included in Uniswap. As a result, a price started more than 4,000% in a single day. As a result, YFI agriculture generated annual yields over 1,000%, the highest of all previous initiatives.
A locked value cycle and a token price
The YFI token can be obtained simply by providing liquidity to a family of DeFi platforms, mainly developed by Cronje, with yEarn.finance being the flagship. The platform automates the search process the highest performance among other DeFi platforms, similar to another recently published protocol.
YFI enables its owners to vote on the system parameters for yEarn and all other platforms. This can help them keep up with the latest developments in agricultural production and manage logs in general.
Although the announcement of the incentive system On Friday affirmed that the token has no value, the markets decided otherwise. Someone else listed the sign at Uniswap and Balancer on Saturday, Allow speculators to buy YFI while its “farmers” can now sell it. Token rating It started at around $ 30 and hit a record high of $ 2,374 the next day.
Talk to Cointelegraph Cronje said he had “no idea” why the token price was behaving that way. “To be honest, I just wanted to distribute voting rights because I don’t want to manage contracts anymore.” added.
One possible clue to this phenomenon is the measurement of “Total blocked” in a log that is often the starting point to evaluate a DeFi project. YEarn started the weekend with a blocked value of approximately $ 8 million, but the number is shoot to more than $ 147 million on Monday.
Daryl Lau, Research Analyst at CoinGecko, dispute that buyers of DeFi governance tokens They appreciate them, according to the TVL. However, since this value depends on the price of the token in a liquidity incentive scenario, this leads to “pseudoponzinomics”. Higher price leads to a higher TVL, which in turn leads to higher prices in a positive feedback loop. However, this cycle can always become negative.
However, More formal assessment methods still value the ability to participate in platform governance. and the sign too can be burned to redeem the “income” generated on all platforms of the family. So, The token must have at least one monetary value.
“Just a fashion”
However, Cronje characterized the hobby of “Profitable Agriculture” of today as a fad to argue that “After distribution, everything will calm down and the system will return to normal.” He stressed that he had no token and said: “The token price is irrelevant to me.”
The price too “doesn’t change the way the system works,” pointed out so “There is no real net effect.”
As it is said Cronje is the only developer, a community is already forming around the family products and. YFI token holders are expected to make a decision soon whether the liquidity generation should be limited and how the value generated by the protocol should accumulate in the token.