Yearn Finance soared 45% in 24hours and it seems to be because of the team’s latest dog WOOFY Token that offers a bi-directional peg to YFI as we can see more in our latest altcoin news.
Despite Dogecoin retracing from the ATH above $0.70, the dog tokens continue to attract massive levels of popularity with DeFi blue-chip YFI emerging as arguably the most prominent team that seeks to cash in on the meme coin craze with the WOOFY token launch recently. The YFI fans also jumped in early and they might have not understood the coin’s utility that saw the price rising but yearn finance soared 45%. The rumors of the new project started circulating over the past 24hours with the users associated with Yearn hinting at a new WUFFY token. The rumors of an airdrop for the users that posted a picture of themselves being licked by a dog and the Yearn developer “Banteg” seeing a flood of face-lick photos uploaded on social media.
— banteg (@banteg) May 11, 2021
As it became the norm for the new releases from the YFI team, fans in the community raced to buy the new token before understanding its utility. Despite WOOFY’s function being to offer a way to redenominate YFI holdings, the interface offered bi-directional YFI to WOOFY conversions at the ratio of 1:1 million, over-exuberant buyers that pushed the price of WOOFY so high to imply YFI’s to be $1.5 million per token. As of this writing, YFI is now trading for about $88,200 after gaining about 43% in one day.
Some liquidity has been added for WOOFY
UI for minting/redeeming coming soonhttps://t.co/eyHg8y66PEhttps://t.co/mSpApPRIzL
— banteg (@banteg) May 11, 2021
Community sentiment seems divided regarding the new dog token with Twitter user “BrotherMuozone” concluding that looking like an unsavory attempt to try to milk value out of the new chunk in the market while adding the experiment actually comprising a brilliantly timed unit that offers insight into whether traders prefer tokens with a larger circulating supply and lower price versus the low supply and high token prices.
Two way peg means its impossible for woofy to trade at a premium to yfi for any significant amount of time
Imo this is just a weird way to transfer wealth from unsophisticated users to arbitrage bots and Ethereum miners https://t.co/CUKig4fHeW
— Hayden Adams 🦄 (@haydenzadams) May 11, 2021
Whether traders choose to hold WOOFY or YFI is arbitrary with the traders’ preference for one token over the other has no impact on the YFI market cap with the introduction of the coin as it can reduce the volatility of YFI’s price by creating arbitrage opportunities between these two tokens. WOOFY changed hands for $0.09 implying a 3% premium over YFI.
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