Due to Yearn.Finance (YFI) massive growth, even defeating Bitcoin(BTC) of its all-time high price, investors flock to the newly-released contracts revealed by YFI founder Andre Conje on his Medium blog.
Mostly driven by the fear-of-missing-out (FOMO) syndrome, Ethereum investors were quick to invest in Liquidity Income (LBI). At the time of writing, there have been 3,869 transfers done on LBI, according to Etherscan. Nearly 93% of its holders used the leading Uniswap DEX for transactions.
According to a Hex Capital researcher’s Twitter thread, Cronje made the first call of its new contract through a mint function, roughly 10 ETH worth 2,282 LBI. Following this is the approval to trade on Uniswap.
Cronje disclaimed that “these contracts are purely for research purposes.” Therefore, it should not be used for any other purpose. Yet, the token gained a lot of ETH investment just hours after its deployment.
One investor, in particular, put in 1,000 ETH, amounting to approximately $350,000 loss overnight. Nonetheless, it is only upon an investor’s discretion to venture on a pilot project. Cronje clearly pointed out the goal of these contracts on his blog:
As I further expand on this concept, I believe that these tokens can become a liquidity bridge that couples together multiple exchange endpoints.
Inspired by protocols such as APML, YAM, UNI, and SNX, Cronje ended up creating a liquidity-based inflationary token that can offset impermanent losses (IL) via liquid governance. LBI’s purpose is to generate as many trading fees as possible and balance out losses of users.
Regardless, crypto traders, such as Crypto Messiah voiced out their opinions. He said that it is quite unacceptable to deploy experimental contracts the way Cronje did.
Andre knows that people will fomo his shit.
Comes with the fame.
Next time, he should deploy experiments on testnet or maybe not write a medium post with contract address links.
A detailed disclaimer was added to this post as an update only after ppl fomod. pic.twitter.com/80Blertkld
— Ad_Infinitum (@CryptoMessiah) October 14, 2020
Despite the backlash from the community, Cronje has previously stood up to his critics by saying that “[he is] still here, still building.” This debunks allegations that he might abandon YFI amid facing challenges.