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DeFi investors have locked in over $67 million in a new yield farming project called APY.Finance within one hour of its launch

The total number of stablecoins locked in the APY.Finance new farming project has reached over $ 67 million within an hour of launch.

APY.Finance – “talented” newly appeared in the market?

APY.Finance uses smart contracts to drive user usage to generate as much profit as possible from the liquidity provided to many other DeFi platforms, using DAI, USDC, and USDT. Users are also rewarded with the platform’s APY governance token for added liquidity.

In a blog post, the project revealed the first month would be the month that liquidity miners earn 900,000 APY tokens, with incentive rewards that vary from month to month. About 31.2 million APY tokens will be mined, and this number represents 31.2% of its total supply.

The APY.Finance token distribution model has raised concerns in the crypto community, with some arguing that regular users will not compete with whales and venture capitalists in the project, which has raised $ 3.6 million in a private sale with investments from Arrington XRP Capital, Alameda research, …

While it’s not clear how many tokens were sold at what price during this private sale, the project’s token distribution model shows that 20% of these tokens will reach investors for $ 0.09 and 16.5. % will reach strategic investors for $ 0.135. Another 20% goes to the group and the group adviser, provided for one year.

Is DeFi still overvalued, and has this hurt Ethereum?

The trend of DeFi productivity farming has led to an increase in gas fees on the Ethereum network. Gas fees on ETH are calculated in gwei, which is equivalent to 0.000000001 Ether. The trend started after the Compound lending protocol launched the COMP governance token distributed to users interacting with the protocol.

This led to a gold rush, as many projects launched their own governance tokens to attract liquidity miners. The gold rush caused transactions on the Ethereum blockchain to skyrocket, to the point where daily gas use reached an all-time high of 80.18 billion in early September.

According to OKEx Insights, a spike in average gas fees occurred when new DeFi tokens for liquidity mining were launched, with gas prices reaching a high of 709 gwei in mid-June during the COMP launch. Gas prices also skyrocketed when YAM, SUSHI, and UNI were launched.

defi-investors-have-locked-in-over-67-million-in-a-new-yield-farming-project-called-apy-finance

This bubbly activity and high gas prices have priced other players on the Ethereum network. UniLogin, a provider of Ethereum integrated solutions, announced its shutdown last month due to high gas fees on ETH.

Sharing with OKEx, co-founder Alex Van de Sande said:

“Reasonable gas cost is crucial for the project to survive. Meanwhile, the referral cost per user is now over $ 130 per user, the equivalent of setting up a new hardware wallet for the project. per user.”

Unusable tokens and decentralized autonomous organizations are among the things that are being priced as the data shows that DeFi protocols and decentralized exchanges make up the majority of the above daily transaction volume. Ethereum for the past 30 days.

While some protocols are looking at layer two scaling solutions for Ethereum to help reduce gas fees for users.

Ilya Abugov, the lead analyst at DappRadar, said:

“Project teams compete to lower their gas fees in order to attract users and developers. Apart from Ethereum, other blockchains like IOST and NEO are launching their own DeFi initiatives.”

Abugov added that while ETH’s second-layer scaling solutions have huge potential to lower gas fees, users and projects can move their liquidity if Ethereum 2.0 cannot solve the problem effectively.

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