Another food-themed decentralized finance (DeFi) project, HotdogSwap has seen its token nosedive in a matter of five minutes. This was a similar trend displayed by YAM token, although an unfixable flaw was reported in this case, which drove away all the farmers. Following the current activities in yield farming, one might predict that the market is becoming more of a pump and dump thing.
Hotdog token got burnt to be priced below $1
The HotdogSwap is a new DeFi project that only existed from September 2. As usual in yield farming, the project offered to deliver insane yields up to one million percent annual percentage yield (APY). Probably, this offer might have attracted a lot of traders, so that the Hotdog token spiked in price within a short period after launch.
The data from Uniswap.info, the analytics dashboard of the leading DEX, pointed out that Hotdog token skyrocketed to over $5,000 in price. However, things got sour for HotdogSwap, as the traders began pulling out, taking advantage of the fat price as early adopters which probably resulted in the nosediving of Hotdog token in price.
Pump and dump in DeFi
The Hotdog token dropped to as low as $1 from a four-digit price point, $4000. Currently, the token is valued at $0.0176 according to Uniswap. The development has got many cryptocurrency traders talking, with the likes of Edward Morra comparing the current activities in yield farming to Bitconnect. Trader Morra tweeted:
“Man, I swear this state of the market is worse than Bitconnect. These just happened today, dozens more examples out there over the last month.”
The sudden rise and fall of DeFi tokens somewhat indicate that traders approach these yield farming projects on a pump and dump mindset. By flocking to the new projects, DeFi traders will shoot up the token price, only to pull out within a short period to grab huge points for themselves and crash the project per se.
