What Are FTM and YFI Achieving With Yield Farming?

By providing a wide range of options for high returns, high yield farming has sparked a boom at DeFi. Not only has the sector seen notable increases in the price of reward tokens, but it has also made it easier for new investors to enter the crypto ecosystem.

While some of the big DeFi tokens have seen major corrections lately, the overall situation in the sector is in good shape. For example, the Total Value Locked (TVL) in DeFi grew from $ 71.7 billion to $ 88.5 billion in just one day.

However, it should also be noted that altcoins such as Fantom (FTM) and Yearn Finance (YFI) has had an impressive rally since the beginning of October.

The x factor

In addition to broader market trends propping up FTM and YFI prices, profitable farming is also an important factor.

While the influx of Ethereum to Fantom was in the $ 10-25 million per day range for most of September, the number has grown exponentially and is currently hovering around $ 450 million.

The introduction of Geist Finance, a new profitable agricultural project, stimulated the inflow of capital. The original growers made 10 times their capital in just one day by providing liquidity.

Cash flow in Fantom | Source: Delphi Digital

Can the hype last?

This is unlikely for FTM.

Whales make up more than half of FTM’s supply (56.35%) and therefore mainly operate profitable agriculture. However, they are gradually withdrawing. This can be clearly seen on the large trading volume chart, which has almost halved since October 8th.

Big deal – Fantom | Source: IntoTheBlock

However, the large trading volume for YFI appears to be in better shape at the time of writing.

Big deal – longing for finance | Source: IntoTheBlock

In addition, if participants actually make agricultural profits, they will need to lock their holdings for an extended period of time in order to receive the profits / rewards.

However, the data from IntoTheBlock shows that the number of short-term FTM holders (those who keep FTM <1 month) has increased more than 5.5-fold since July.

It’s clear that newcomers have entered the market just to make quick money and run away.

Number of dealers – Fantom | Source: IntoTheBlock

Over the same period, the number of YFI dealers has decreased, indicating the long-term interest of the majority of participants. In addition, YFI’s TVL is increasing while that of FTM is starting to decrease.

As a result, FTM’s profit farming hype won’t last long compared to YFI. The consequence of this is that FTM cannot afford to extend the uptrend while YFI’s outlook is relatively better.

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