Founder of Yearn.finance launches test project, rapidly gains support

Andre Cronje, the founder of Yearn.finance (YFI), recently took an experimental new platform public, and it received a warm reception from potential investors. Sadly, the project was never meant to be launched as a new product, although investors quickly piled into Ethereum smart-contracts to the tune of $6 million. The project was announced via a Medium post on Cronje's account titled, “Crypto Economics, Perpetual Liquidity and IL offsets.” He also explicitly stated that the three Ethereum contracts that were included in the post were, “purely for research purposes and should not be used for any other purpose.” Users took to social media to promote the platform, and after just a few hours, the group of excited investors were using the platform to generate the Liquidity Income (LBI) token, which is, like the platform, totally experimental at this time.

Why it matters:Despite the massive losses in most DeFi token since their peak in the summer of this year, it appears that there is still support from the community for new DeFi platforms. This sort of blind speculation is indicative of an overheated market, which could signal that there are more losses coming for the latest crop of DeFi tokens. Although some of the DeFi platforms that were popular in 2020 will likely create lasting value for token holders, there are so many projects in the field that many are sure to drop off the map.