Bitcoin, DeFi , Yield Farming, and Ethereum Update

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Description

Latest Bitcoin and Cryptocurrency news and trends. We take a look at the key events affecting the blockchain sector and review market movements. Combining both fundamental analysis and technical analy...

AI Analysis

This video dives into the chaotic weekend of crypto, especially the drama around SushiSwap, a major market dip, and the intense world of DeFi and yield farming. It highlights the inherent risks of this fast-moving space, emphasizing the importance of sensible risk management and emotional control, rather than chasing sky-high returns blindly.

Here's a breakdown of the key points:

* Market Turmoil and Recovery: The market experienced a significant hit over the weekend, with Bitcoin nearly dropping below $10,000 and Ethereum falling close to $300. There are now slight signs of recovery, with many altcoins showing over 10% gains in the past 24 hours. The presenter notes the fear from traditional markets bleeding into crypto, leading to widespread profit-taking and anxiety.
* SushiSwap ($SUSHI) Debacle:
* SushiSwap, a decentralized exchange project, faced a huge disaster when its anonymous founder, Chef Nomi, sold all of their allocated Sushi tokens (around 10% of the total supply) on the open market. This caused a massive price dump and outrage in the community, who expected the funds to remain in the project.
* The presenter views this as a "rage dump" rather than a true scam, noting that Chef Nomi's 10% allocation was transparently coded and mentioned in the Medium article. The act was within their control, highlighting the "don't trust, verify" ethos of crypto.
* Chef Nomi later transferred control of the SushiSwap project to Sam Bankman-Fried, CEO of Serum and Alameda Fund, who is highly respected in the DeFi space. This move helped Sushi's price recover and instilled more trust, as Sam was likely a major Sushi farmer himself and has an incentive to see the project succeed.
* The presenter dismisses the "scam" label often thrown around too liberally in crypto, arguing that SushiSwap aims to create an innovative decentralized exchange that better rewards liquidity providers.
* The incident highlights the open-source nature of crypto, where projects can be forked and modified, which is seen as a driver of rapid innovation rather than something negative.
* Yield Farming Risks: Impermanent Loss and New Projects:
* The SushiSwap incident made everyone suspicious of yield farming, which is rightful.
* Many participants in new yield farming projects suffered significant losses due to "impermanent loss," where the value of their deposited assets drops drastically if the new farmed coin's price plummets. The presenter personally learned this the hard way with YFFI, which dropped two-thirds of its value shortly after farming.
* Despite seeing extremely high annual percentage gains (APRs) like 60,000% or even 150,000% on new projects, the presenter consciously avoided joining liquidity pools for these newly launched coins (like Noodles, Kimchi, Hot Dog, Yuno Finance) due to the high risk of their price being "obliterated."
* This cautious approach proved to be a "very, very good decision," as many of these new coins saw 99% dips, wiping out positions.
* Personal Yield Farming Strategy & Risk Management:
* The presenter maintains a cautious stance, holding a significant portion of USDT and other stablecoins to enable quick market entries during dips.
* During the recent dip, only about 10% of USDT was used to buy positions, as the presenter was already "very extended" and prioritized risk management over "catching a falling knife."
* Lessons from the 2017 bull market are recalled, specifically Ethereum's month-long dip in June-July 2017, which felt like the end of crypto but later became insignificant compared to the massive bull run. This historical perspective reinforces the need for caution and long-term thinking.
* The presenter prioritizes being "emotionless and robotic" in trading decisions to make logical choices and avoid reckless gambling, unlike many "bad investors" who voiced their anger on Twitter during the dip.
* Current Farming Activities and Unsuccessful Ventures:
* Currently farming Sushi (after collecting initial rewards, 50% was sold, 50% put back into a Sushi party for speculative gain), Pylon.finance (YA link and wrapped Bitcoin pools), and YFV.finance's seed pool (stablecoins like Tether for around 100% APR with no impermanent loss risk).
* Also in REN, BAT, and KNC pools, but exited a Bitcoin balancer pool due to high exposure. Exited Harvest.finance's base farm due to "risk to funds."
* Tried Tron-based DeFi, including Perl and Salmon, initially interested due to the "China angle." However, these proved unsuccessful, with Perl and Thai dropping significantly in value, leading to large impermanent losses. Salmon, described as "Sushi on Tron," also nose-dived.
* These experiences underscore that not all ventures yield profit, and sharing losses balances the narrative against constant "victory" stories seen from "cherry-picked" advertisements.
* The Chinese DeFi Landscape:
* The presenter observed a "China fever" in DeFi, particularly with Tron-based projects.
* A significant event was the collapse of Tuiba, a Chinese MLM scam with an artificially inflated price graph that defrauded many Chinese investors. This highlights the dangers of pump-and-dump schemes prevalent in the space.
* The Dangers of Crypto and Importance of Rationality:
* The crypto space is "insane" and "highly risky." Many people who lack proper risk management skills shouldn't be involved.
* Crypto is not a "video game"; it involves real money and people can lose everything. Strong warnings are issued against over-leveraged positions.
* The presenter advocates for community collaboration rather than tribalism between projects (e.g., PLAIR and 8Hours Foundation), believing that the entire ecosystem grows together.
* ETH 2.0 vs. DeFi Yields:
* The vast difference in yields (e.g., 500%+ in DeFi vs. 8-12% for ETH 2.0 staking) reflects vastly different risk profiles. High DeFi yields come with extreme risks like impermanent loss or project failure, while ETH 2.0 is considered much safer due to the established Ethereum community.
TrustSwap's Role: TrustSwap offers vesting options that could prevent situations like Chef Nomi's dump. However, it requires developers to choose* to use them, as in Sushi's case, Nomi simply chose not to implement vesting despite options being available.
* General Takeaways:
* Do your research, don't be greedy, and avoid rushing into new projects.
* Yield farming has effectively replaced traditional airdrops as a common way for projects to distribute tokens.
* The ability to "farm" coins for free reduces the need to speculate and buy them on the open market, which is a "spoiling" but beneficial aspect for those who understand the risks.

Transcript

Hey guys, today is the 7th. Yeah, we're all the way here, huh? So quickly to the 7th of September on Monday here, that's at least in Hong Kong. And a lot has happened over the weekend. A lot of drama has happened over the weekend, especially in relation to the price of the overall market. Boy, did we take a pretty big hit. And, yep. But, you know, crypto moved on, which is great. So we're starting at a time when the market is showing slight signs of recovery. And we'll talk about the general se...