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DeFi KIMCHI with 120,000% the new big thing or is there a catch?

Photo of: Dennis Ramos
by Dennis Ramos

Looks like the DeFi food party is still on. Yet another day and another food-related token being offered in DeFi. The new forked food platter now has Kimchi named after the Korean dish. The fermented dish is a fork of the popular Sushiswap protocol which was forked from Uniswap last week. Just launched on Tuesday, Kimchi has already accrued close to $250,000 in liquidity in less than 24 hours as per its dashboard claims.  In the first few hours of its launch, the protocol has offered an APY upward of 120,000% on the KIMCHI/TEND pool which is more than 70,000% compared to other Kimchi pools. The numbers still stand tall like a giant despite a minor decrease. 

Source: Kimchi Finance

Kimchi is the latest to join the DeFi food bandwagon. It is slightly similar to SushiSwap because it more or less offers a similar platform. SushiSwap as we know it has already taken liquidity from Uniswap to offer better and greater rewards including a governance token. As per the initial reports, Kimchi is supposedly a copycat of Yuno Finance which also is a copy of Sushi to offer better returns on Uniswap liquidity pool tokens. In fact, Yuno in its twitter feed jested that the clone of the clones was showing fake Total value locked numbers on its dashboard. The tweet read,

“When kimchi copied our code, they didn’t even read through what is underneath. (And you didn’t remove our GA tags). Their actual TVL is around 5-8M. You guys are probably farming fake numbers anyways,”

Kimchi allows the yield farmers to now  ETH, SUSHI, TEND, USDT, or Uniswap LP assets. They are hoping that they will be able to earn very high interest for generating liquidity for the platform which we will have to wait and see. But there can be some catch elsewhere because a developer named Roman Semenov has indeed done some research in this clone of a thing revealing that this could just be the beginning of some scam. Kimchi replied to this saying that they have benchmarked Sushi’s time lock function and locked into an ‘infinite loop’ suggesting that there is absolutely no control over the protocol per se. 

Meanwhile, BitMEX CEO Arthur Hayes, who has been shilling new DeFi food protocols for some week now has given his nod for approval to this new clone. 

“You know I love me some Korean food. KIMCHI is lit. It’s a stable of the CHAD diet. Get on my level”.

According to CoinGecko  Kimchi was seen trading hands for $6.20 which gave it an estimated $27 million worth of market cap already. Sushi is seen trading down 40% from its peak registered earlier this week at around $7.20. TVL was reported at $1.2 billion which still eats 67% of slugged liquidity from Uniswap. 

With many differing opinions on Kimchi, we have to least give it some time to form some character for analysts to understand if this has some solid fundamentals or a mere addition to scams.