Yield farming platform APY.Finance locks $67 million in first hour. What is behind?
Today APY.Finance opened their liquidity mining program. Within 1 hour of the launch, the platform witnessed total of $67 million added to their liquidity mining smart contract.
Why such high interest:
Since the closure of APY.Finance private sale round, the team worked out on a plan to cheer-up community sentiment and designed liquidity mining in order to have the fair distribution of APY governance tokens in the hands of the community members, thereby truly decentralizing the power over platform economics decision.
I believe such high interest may be due to some yield farmers forgetting that they are participating in distribution of governance token. Users who are adding funds to APY.Finance platform are not participating in yield farming any DeFi strategy but mining APY governance tokens instead. This was already mentioned in the earlier blog post (1 and 2) by the team.
The first month will see 900,000 APY tokens mined, the official blog post outlined, that incentive details will vary month-to-month. The total amount of APY to be mined will be total 31.2 million tokens, or 31.2% of total supply.
As of this writing, I see total of 1000+ addresses have already interacted with the APY liquidity mining smart contract address. This is just one day and that already represent the successful implementation of companies vision of making APY governance token truly decentralized and owned by the community.
Closing remarks:
In my believe the team also did not expected such high interest level and may now have to get back to the drawing board to review the reward scheme. Something similar to SNX staking wherein rewards are generated through the inflationary monetary policy. Usually stakes in Synthetix are escrow for a year and the SNX staking rewards enabled by the inflationary supply are set to decrease gradually until 2023.
Currently the governance tokens minted from APY.Finance's liquidity mining program are escrow for 6 months and available only for one month and set to gradually decrease in this period.