Decentralized Finance (DeFi) has grown to become the hottest buzzword in the cryptocurrency space in recent times, and for good reason. The DeFi movement is pioneering a new wave of permissionless and trustless transactions within the blockchain space. Data reveals that over $9 billion worth of assets are currently locked in the DeFi space, indicating a massive industry growth. To put this in perspective, as of July 1, 2020, the total value of locked assets in DeFi was $1.882 billion. By September 1, 2020, this value had increased by more than 450% to sit at $8.723 billion.
According to Peter Johnson, a former Morgan Stanley banker who is now an executive at Jump Capital, a crypto and FinTech company, "The simplest way to describe DeFi is as an open financial network. If you want to send, lend or borrow money you don't need to join a private network like PayPal or Fedwire or a bank."
Recent rallying around the DeFi space has given rise to an even newer and hotter phenomenon known as “yield farming.” Yield farming is a new way to earn rewards with cryptocurrency holdings by utilizing permissionless liquidity pools. Furthermore, traders can lend or borrow digital assets not just to receive interest or a loan, but to also receive new types of cryptocurrencies.
Bearing this in mind, high-yield farming program, “Volcano” has kicked off with a Dutch auction for Cryptokitties KittieFight Game.
Volcano & the Dutch Auction
The Volcano faucet is a KTY token liquidity mechanism for the KittieFight ecosystem. It incentivizes on-chain liquidity by distributing KTY and SDAO tokens to yield farmers who provide liquidity on Uniswap V2. The KTY token rewards early participation, while SDAO is a governance token that incentivizes long-term participation in the network.
To get things started, the lucrative yield farming program has kicked off with a limited-time Dutch auction. The auction is the first phase of the distribution of KTY tokens ahead of the launch of Volcano. During the auction, users will be able to democratically decide the price of KTY by sending Ether bids during a 2-week bidding period.
As earlier stated, yield farming allows investors to earn rewards using permissionless liquidity pools. In the case of Volcano, users who stake Uniswap liquidity pool tokens will be rewarded with KTY and DAO governance tokens (SDAO). The percentage of ROI a user gets is dependent on the amount staked and its duration. Put differently, users who stake more and for longer periods of over 6 months will receive a greater share of KTY and SDAO tokens.
Volcano supports a plethora of Uniswap-supported tokens including WETH, ANT, yDAI, yYFI, yyCRV, yaLink, aLend, aSNX, yETH, aYfi, 2key, GNO, yETH. Participants who provide liquidity on Uniswap could also get extra rewards of up to 6000%.
The KittieFight Dream
Since 2018, the popularity and demand for Cryptokitties have continued to drop, leaving early investors hanging. KittieFight is creating a rather interesting use case for Cryptokitties. It is a DeFi Lending backed, FOMO Mortal Kombat Cryptokitties MMO Game. Its gamified set up allows NFT holders and community users in the Cryptokitties ecosystem to earn Ether and KittieFight KTY tokens by participating in competitive combat and coalition-based games. In their own words, “KittieFight is Mortal Kombat for Cryptokitties. In kittieFIGHT, tokens are awarded to winners of each fight session that utilizes customized fighting kittie characters derived from the Cryptokitties platform.”
As an added benefit to its interesting use case, KittieFight indirectly cuts the oversupply of NFT assets of Cryptokitties. This is made possible by a sink mechanism known as KittieHELL. The Cryptokitties of players who lose matches are sent to KittieHELL.
Conclusion
Yield farming is without a doubt the rave of the moment and smart investors are jumping on the train. The tokenomics of KittieFight appears promising and its limited-time Dutch auction will reward early participants with KTY tokens. With that said, you are welcome to be part of KittieFight.
