Another food inspired DeFi protocol locked up half a billion in value just hours after launch. No we are not talking about SushiSwap or Yam, this is Kimchi Finance. As you may have expected, users can provide liquidity to earn KIMCHI tokens as rewards.
Another fork of a fork of a fork?
KIMCHI token is a fork of Yuno and Sushi, essentially aiming to be an improved version of Uniswap. The new Kimchi DeFi farming token was able to lock up $500M in value from staking, before quickly tumbling down to $150M. This appears to be a new pattern that mirrors other DeFi projects, which really resembles a token pump and dump. Initial launch attracts a horde of hungry DeFi farmers who surge the token’s price up, only to dump their rewards. Yam was the most notably, flying past $150, to only crash down to $0 in just 48 hours.
So can I make money… The protocol allows you to farm KIMCHI tokens by providing Uniswap liquidity tokens (ETH, SUSHI, TEND, or USDT). Apparently, you can earn up to 66,000 APY. Of course, be warned the protocols smart contracts have not been audited.
- The project has also launched gKIMCHI Token, which they have announced as an upgrade. It appears the new token adds features to reduce the rewards on a weekly basis.
So will this protocol launch… Kimchi Finance doesn’t really help its case by stating “KIMCHI could be the next hot DeFi farming token. Who knows?!” on its website. It seems that right now the appeal for DeFi users is to move from one farming protocol to the next, following the hype and earning rewards. The problem is for Kimchi Finance to be a success, they need liquidity providers to stick around.