Source: Adobe/Tricky Shark.

A brand-new report has actually discovered that so-called “yield farming” has actually taken the decentralized financing (DeFi) scene “by storm” of late– however has actually stopped working to bring big quantities of brand-new people to the DeFi table, and has actually done little to assist the “DeFi community grow beyond its current borders.”

These were the findings of a quarterly report from Consensys‘ Codefi system.

Yield farmers use the Substance– developed COMPENSATION governance token, which was launched in June this year.

COMPENSATION tokens are used as everyday benefits daily to customers and lending institutions on the Substance platform. The report’s authors describe that this has actually seen “resourceful DeFi users optimizing their COMPENSATION yield (i.e. “yield farming”) by utilizing DeFi systems to open capital and after that financing or loaning on Substance.”

The authors yield that yield farming “took the DeFi ecosystem by storm in the last two weeks of the quarter,” including that “crucial metrics like ethereum (ETH) locked and daily active users soared after being fairly stagnant earlier in the quarter.”

Figures revealed that the boost in ETH secured Substance increased by “nearly four times” in the last 2 weeks of the quarter.

Most importantly, however, the press reporters added that an analysis of the information recommended that “the frenzy did not bring many new users into DeFi.”

The authors stated,

“Looking at the big picture, COMP did not impact DeFi user growth substantially – i.e. COMP did not bring significant numbers of new DeFi users into the ecosystem. However, Compound’s own considerable increase in user growth in just the last two weeks of the quarter suggests that many DeFi users who may not have been using the protocol in the past chose to do so because of the new financial mechanisms allowed by yield farming.”

According to them, if we looked simply at user growth in Q2 2020, we may presume absolutely nothing substantial had actually taken place the past couple of months.

“User growth increased steadily and each protocol appears to have gained new users at the same rate and within the same ratio as they had the entire quarter,” they added.

DeFi platform statistics

Source: Consensys’ Codefi.

As formerly reported, Ethereum co-founder Vitalik Buterin has actually likewise spoken up about yield farming just recently, identifying the phenomenon “unsustainable.”

The post Yield Farming ‘Frenzy’ Didn’t Boost DeFi User Numbers appeared first on World Weekly News.