Delphi Daily

We’re back in the manic phase of crypto, where it’s too hard to keep up with the latest DeFi liquidity mining (yield farming) play. By the time you visit a project’s site, their token is already up and you missed it. Compound started this hurricane of interest, followed by a plethora of others including Balancer, Curve, AAVE, YFI and dozens more.

The real question is what happens when the music stops, slows down, or the song changes? Let’s look at the extremes:

  1. The mega buzz around yield farming never dies, and goes on forever (never going to happen).
  2. Yield farming slowly calms down. People either stay or leave a project due to either lower yield farming rewards in terms of issuance, or in terms of a lower token price for the received token, or a mix of both. Whether users stay on the platform despite this is the question. The assumption would be that a subset of users remain (~50% of users and liquidity stays on the platform)
  3. Yield farming is really just financial engineering where users hop from one project to the next, it blows up, and users exit this platform with limited stickiness once the music stops. The assumption would be that only a marginal (sub 10%) of users and liquidity stays on the platform.

I think we all agree #1 is illogical. Buzz by definition i

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