Since the beginning of the year, the amount of Tether printed has tripled. Even more, the amount increased %50 within nearly 2 months. However, Bitcoin and altcoins are not performing as expected. What is the reason? Where is money heading for?
Well, to be able to catch up with the latest trends, I always check the tracking websites so that I can have an idea about the major trends. A couple of weeks ago, I realized something new on the Coingecko home page. The website allocated a section for De-Fi with a burning fire icon next to it. Yet, the question is: Is De-Fi hot now? If your answer is yes, please check your twitter timeline.
Starting as a part of De-Fi, Yield farming gave birth to the flippening of the trend. Currently, yield farming cannot be labeled as a part of the Decentralized Finance product. It evolved; created its own ecosystem with a short period of time than ever being observed.
Guys, it was just a couple of months ago when we were looking for the best %APY for crypto interest/staking rewards or locking our coins in a DEX to get some portion of trading fees from there. When did it over? To be honest, I could not realize the collapse of the trend. De-Fi and the "Be Your Own Bank" idea was overthrown by Yield Farming and "Be the Liquidity Provider Himself"
I am a huge fan of De-Fi and products and when the yield farming started rising, I could not imagine such a growth. However, why is it funded that much? What makes it idiosyncratic?
Yield Farming is a kind of self-satisfactory process. You have your own assets but you let some parties support service by using your assets. However, whenever you decide, you can take your money back thanks to an audited smart contract. While letting them utilize your assets, you are given a token as an incentive. Even if the token is useless, your money is safe at the end of the day. So, sometimes it is win-win; sometimes it is no-lose...
Apart from getting your money back without any third party, Yield Farming is funded thanks to its "passive income" facility. Your only action was to accept the pop-up windows coming from Metamask then you start earning.
Finally, of course, the major reason is the flow of money over there. "Put your money where your mouth is" the motto works perfectly. As people earn, they keep funding the pools to let it grow enormously.
I'm fascinated with the outstanding hype over Yield Farming. By just looking at the Tether chart, one can undeniably say that people are hyped. However, there are some other aspects to be regarded. For example, which altcoins are invested during this period, and what was the reaction of Bitcoin?
View the website of wBitcoin Proof of Assets
To handle the second question, we can check wBitcoin operating on Ethereum Blockchain. It is pegged to the price of Bitcoin and plays the role of being a bridge between Bitcoin and Ethereum. As long as it does not cause any kind of inflation in Bitcoin, the project was already expected to be launched. However, the fund might be allocated for Bitcoin is now used to fund wBitcoin to utilize Yield Farming / De-Fi products... The benefits are open to discussion.
Let's talk about the first and the most important question; which altcoins could take a slice from the cake?
- Only the ones adaptable for Yield Farming and the copy-paste versions of them.
The entrance of money is still going on. Total market cap has doubled. However, the majority of the crypto projects do not get enough attention in this term. As crypto-enthusiasts/ investors, we either follow the way or stay away from the mania...
I'm choose to observe the ongoing situation from outside. If I were to get in, most probably I would provide liquidity to Sushi token pools for now. Yet, since I do not feel comfortable enough, for a short time I'll continue observing. During that time, I keep investing in "old-fashioned" De-Fi products.
One more thing is that CeDe-Fi or such actions also have impact on our investment decisions. Make sure that you did enough research before diving into the pools.
There are many opportunities taking place in crypto ecosystem. Depending on your risk appetite, you may make nice profits. Yet, never forget that if one does not lose, another one cannot earn in a marketplace. Try to be the lucky one.
What about you?
Do you invest in obsolete De-Fi products or Yield Farming? Why?
Please leave your comments to inform us.