Crypto investors have been reported to be abandoning Chinese crypto exchanges en masse to join the (decentralized finance DeFi) yield farming craze.
On September 6, Chinese blockchain and crypto reporter Colin Wu said that the Chinese crypto community is launching a “coin withdrawal campaign”, wherein they are liquidating their assets from crypto exchanges in the country, only to deposit them in decentralized exchanges (DEX).
Breaking: On Sep 6th, many exchanges in China experienced difficulties in withdrawing coins and shutdowns. Chinese community is launching a “coin withdrawal campaign”, calling to withdraw all USDT and crypto in the exchange and delete their accounts. pic.twitter.com/JwUzRFbqXx
— Colin Wu（WuBlockchain） (@WuBlockchain) September 7, 2020
He added that this was primarily due to the so-called “yield farming”, an activity wherein cryptocurrency users would lend their crypto funds to others through smart contracts. This takes form in lending platforms popular to the DeFi space.
As to how these yield farmers make their way around the system to earn more money, less information is available. This is because the farmers want to keep their methods to themselves, for fear that if others get wind about it, they too will join the craze and make the competition tougher and the activity less profitable.
Wu backed his statements with data from CryptoQuant, a data platform for cryptocurrency traders. He noted that in the wake of ETH’s sharp drop, investors have been buying the dips from exchanges and transferring them to DEXs.
The data shows that due to the popularity of yield farming, especially the recent sharp drop in the price of ETH, many users buy bottoms on exchanges and then transfer to DEX for farming. The stock of ETH and other farm crypto on the exchange is falling frantically. pic.twitter.com/I6982HMVTL
— Colin Wu（WuBlockchain） (@WuBlockchain) September 7, 2020
As a response to the ongoing craze, he observed that crypto exchanges have begun to list DeFi coins like “crazy” to entice users to gamble in the secondary market and assist users with their yield farming activities.
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