A new report has found that so-called “yield farming” has taken the decentralized finance (DeFi) scene “by storm” of late – but has failed to bring large amounts of new people to the DeFi table, and has done little to help the “DeFi community grow beyond its current borders.”
These were the findings of a quarterly report from ConsenSys’ Codefi unit.
Yield farmers make use of the Compound-developed COMP governance token, which was released in June this year.
COMP tokens are offered as daily rewards daily to borrowers and lenders on the Compound platform. The report’s authors explain that this has seen “enterprising DeFi users maximizing their COMP yield (i.e. “yield farming”) by using DeFi mechanisms to unlock capital and then lending or borrowing on Compound.”
The authors concede that yield farming “took the DeFi ecosystem by storm in the last two weeks of the quarter,” adding that “crucial metrics like ethereum (ETH) locked and daily active users soared after being fairly stagnant earlier in the quarter.”
Figures showed that the increase in ETH locked in Compound increased by “nearly four times” in the last two weeks of the quarter.
Crucially, though, the reporters added that an analysis of the data suggested that “the frenzy did not bring many new users into DeFi.”
The authors said,