Unchained DeFi Yield Farming: Why It's All the Rage But Risky - Ep.180
Jul 7, 2020
Dan Elitzer, an investor at IDEO CoLab Ventures, and Will Price, a data scientist at Flipside Crypto, dive into the thrilling yet risky world of yield farming. They discuss how liquidity mining affects user incentives and the precarious nature of protocol interactions. The potential valuation of DeFi tokens, particularly Compound's impact on the ecosystem, is critically examined. They also explore security challenges in yield farming and speculate on the future of Ethereum and Bitcoin integration in decentralized finance.
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Liquidity Mining Goals
- Liquidity mining aims to decentralize governance and boost protocol usage.
- Giving ownership to users subsidizes rates and fuels growth, like Compound's surge.
COMP Token's Impact
- The COMP token's unexpected high value incentivized inorganic user behavior.
- Users contrive strategies to maximize governance token rewards, impacting other projects.
User Perspective on COMP
- Users currently see COMP as a bonus, but long-term, most Compound users won't need it.
- Early adopters seek ownership in something potentially valuable, subsidizing current rates.