Crypto 101: What is Vampire Attack? Strategy to attract liquidity.
Let’s find out the overview of Vampire Attack and how it works, as well as the outstanding features of this strategy.
What is a “Vampire Attack”?
Vampire Attack is a new platform with different encouragement strategies to motivate the liquidity suppliers on old platforms to accept to turn into their bonds to a new platform.
How does the Vampire Attack work?
This is a simple mechanism of operation of Vampire Attack:
Steps 1 & 2: Users deposit A token into platform A (which can be understood as the old platform) to get the LP token.
Steps 3 & 4: Platform B (newly launched platform) will have strategies and policies to encourage users to deposit LP tokens of A platform to their project with a token B reward.
After the end of the Vampire Attack, theoretically, the new platform has succeeded in significantly improving the amount of liquidity from the user of the old platform. And the liquidity on the old platform may decrease.
Outstanding features of Vampire Attack.
It helps the project quickly attract liquidity.
Uniswap and Sushiswap are typical examples.
In the case of sushiswap, Uniswap’s Liquification provider is encouraged to stake LP Tokens on Sushiswap so they can receive additional rewards distributed by $SUSHI.
Sushiswap starts with a pretty positive release strategy for $SUSHI. Uniswap’s Liquid and Provider on pools such as SNX/ETH, LEND/ETH, YFI/ETH, and LINK/ETH.
Uniswap’s Liquidity Provider is attracted by APY from +200 – 1000%, starting to transfer more and more LP tokens to Sushiswap. A few hours after its debut, Sushiswap achieved TVL up to 150 million dollars.
It helps the project quickly attract new users.
OpenSea is a non-fungible token trading floor (NFT Marketplace). OpenSea allows users to sell, exchange and trade NFTS assets. OpenSea dominated the field of NFTS in the Crypto market for a long time.
Looksrare was born after OpenSea. Looksrare is the NFT market that prioritizes the community by actively rewarding traders, collectors, and creators when participating. Looksrare implemented the AirDrop program at the launch (120,000,000 million $LOOKS accounting for 12% of the total supply) to attract users from OpenSEA.
LooksRare also applies the Vampire Attack strategy to OpenSEA, using the Incentive strategy that Sushiswap used with Uniswap to attract attention from the NFTS user community.
With the deployment of $LOOKS when OpenSEA does not have tokens, Looksrare helps users (especially $LOOKS holders) get more benefits than Opensea, such as the entire transaction fee will be divided by $LOOKS stakers ( 2% on each NFT transaction). Staking $LOOKS also receives more rewards.
Because of these reasons, Looksrare has attracted a lot of new users; volume and the revenue of the revenue also increased significantly. There was a time when Looksrare’s revenue surpassed OpenSea.
Responses to the vampire attack
From the project perspective.
Each piece of the Crypto market has had familiar and outstanding names. However, the market is still a young market; there are many opportunities to improve and develop.
Therefore, in the same segment, more new projects with creative improvements will compete and develop with old projects.
Vampire Attack will be and more and more projects implemented in many other projects with more creative countries, not stopping at Farm with APY/APR, but also can receive NFTS items that can be used. Used in the following roadmap of the project, or the right to participate in partners’ projects. Or large airdrops for Early Contributors.
From the retail investor’s perspective
Vampire Attack is an opportunity for investors to earn profits with new projects because Vampire’s purpose is to attract liquidity from the community, and users will be returned with a worthy reward.
However, you still need to evaluate the project and project team… to avoid new projects that take advantage of the community of the old project to perform fraudulent acts and scams and appropriate the number of tokens owned by the old project.
I hope the information above will help you understand the outstanding features of the Vampire Attack. From there, take advantage of Vampire Attack to bring investors that optimize your investments.
If you have any questions, comments, suggestions, or ideas about the project, please email [email protected].
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.