The Kimchi Premium became a famous phenomenon in South Korea as the price of Bitcoin traded far higher than international exchanges – but it has been eclipsed by a new Decentralized Finance platform going by the very same moniker.
Over the past twelve hours the KIMCHI DeFi platform has reportedly locked in over half a billion dollars worth of value in cryptocurrency tokens as users seemingly clamour to cash in on the staking returns being offered. Data from Coingecko shows that the KIMCHI/ETH trading pair has done $85mln worth of transaction volumes in the past 24 hours.
Notsofast, a user on Twitter, shared a screenshot of KIMCHI DeFi’s meteoric growth which has left some other big movers in the space by the wayside.
What is KIMCHI?
A quick visit to the KIMCHI DeFi token contract on Etherscan will tell you that the project is a fork from two other DeFi tokens, namely SUSHI and YUNO. It is worth noting that SUSHI has also only been existence for a few days and also garnered a massive amount of interest and staked tokens.
The platform seemingly offers 8 different trading pairs altogether which allow users to stake various ETH-based tokens in return for KIMCHI tokens that will garner varying Annual Percentage Yields.
It is hardly surprising that the platform has seen a massive explosion in the amount of cryptocurrency tokens being staked given the massive returns being touted.
Users are being shown potential Annual Percentage Yields of 40975% for staking SUSHI tokens for KIMCHI, with a similar percentage being offered for TEND/KIMCHI staking.
Social media reactions mixed
With this new token making waves in the hours since its launch there is a fairly mixed reaction on Crypto Twitter. With many users well-versed in the inherent risks associated with the burgeoning DeFi sector, some seem optimistic while others are outright skeptical of the project.
Cryptocurrency trading analyst Josh Rager described KIMCHI’s rise as an irrational play while cautioning the danger of farming tokens like it:
One Twitter user warned that the KIMCHI DeFi token could be an exit scam, while saying that the YUNO platform was a Uniswap ‘rug pull scam’, which means that the developers will make off staked coins and leave users with useless DeFi yield tokens.
Another user echoed those sentiments highlighting a piece of contract that shows the developers have the ability to mint an infinite amount of coins.
Mike Dudas, founder of The Block, delivered what probably best sums up the hype-fueled actions of investors climbing into a brand-new DeFi platform: