The DeFi space has taken some wild twists as of late, causing crypto Twitter feeds to look a lot more like a menu at a local dining establishment. The bizarre world of decentralized finance and yield farming tokens has taken a turn for the weirder, bringing about a flurry of food-named crypto assets on Uniswap.
The spectacle alone makes getting sucked into the hottest trend in crypto all the more difficult. Add in the constant talk of profits being generated from farmers taking risks on Uniswap, and you’ve got a scenario where investors are getting burned by letting their liquidity sit in the cooker too long.
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Early on in the decentralized finance trend, there were several comparisons to the ICO boom of 2017. At the time, feverish interest in ERC-20 tokens launched as part of early fundraising efforts in exchange for newly minted coins, pushed Ethereum prices to over $1,000.
However, analysts argued that DeFi was far more sustainable, adding real value and substance to the cryptocurrency space. But like everything in the world of crypto, irrational exuberance takes over, and trends over-extend.
Cryptocurrencies end up rising and falling a lot more than anyone expects. Trend momentum can be seemingly unstoppable at times. And that’s what’s happening across the DeFi space, not just in valuations, but in interest reaching borderline insanity and extreme greed.
Pizza, Hot Dogs, & Sushi: What Will The Crypto Market Cook Up Next?
It has led to some crypto insiders speculating over coins they know are worthless but want to try and profit anyway. It is very much like the ICO boom, except this time around, these insiders know exactly what they’re risking – yet they are doing it regardless.
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Some market watchers have claimed it is not wise to search for the next big DeFi superstar, as there’s a risk of getting burned. But because these confident and exuberant crypto investors blinded by greed simply cannot resist the allure of profits, they are betting their Ethereum and suffering losses.
Take two tokens fresh out of the Uniswap oven: Pizza and Hot Dog. These tokens were being dumped while others were mid-farming them at decent valuations, but have since plummeted to nearly zero per token.
Hot Dog & Pizza Uniswap Ethereum-Based ERC-20 Tokens | Source: TradingView
Those that had their liquidity pooled instead took a bath in losses and got burned by these two delicious-sounding DeFi tokens.
Other tokens have been just as hot, but far more successful, including Sushi, and previously, Yams. Knock-offs are popping up each day, and eventually, all the fun and food-friendly names will be taken. Where will the wild world of DeFi and crypto turn next?