The yield farming craze has led to huge USDT and ETH withdrawals In China as the investors started withdrawing their funds and to lock them up on the obscure protocols that promise high yields according to the latest reports that we have in our tether cryptocurrency news.
Colin Wu, a reporter that is focused on the local blockchain and crypto sector in China, said that due to the yield farming craze, many exchanges in china experienced a lot of difficulties during coin withdrawal and shutdowns. He claimed that this was caused by the Chinese crypto community withdrawing liquidity and the transferring millions of dollars worth of Tether and many other altcoins to yield farming projects such as Yearn Finance and Sushiswap.
Breaking: On Sep 6th, many exchanges in China experienced difficulties in withdrawing coins and shutdowns. Chinese community is launching a “coin withdrawal campaign”, calling to withdraw all USDT and crypto in the exchange and delete their accounts. pic.twitter.com/JwUzRFbqXx
— Colin Wu（WuBlockchain） (@WuBlockchain) September 7, 2020
Wu supported the idea that using data from CryptoQuant will show how the price drop over the weekend will cause the investors to buy the dip and to transfer them to a decentralized exchange just like Uniswap does to other tokens. The data shows exchanges “reserves” saw a huge dip. Bitfinex and Kucoin, among the most popular exchanges, were the most affected as Wu added:
“The “withdrawal movement” is widely spread, but the actual impact is uncertain. Exchanges are also starting to defend, such as a crazy listing of DeFi coins to make users gamble in the secondary market, and helping users with yield farming.”
Wu’s comments came when binance launched its “Launch Pool” service on Sunday to provide yields by using the BNB token. Binance said that BNB holders are choosing to go to Launch Pool will get interested in projects that issue their own tokens on the Binance Chain such as Bella Protocol. The rush for the Defi listings and the yield farming picked up quite a bit over the past month with projects locking up millions upon launch similar to the 201 ICO bubble.
“We’re excited to host @BellaProtocol as Launchpool’s first #DeFi offering on the Binance platform, and are delighted to offer #Binance users the opportunity to securely farm new assets.” – @cz_binance https://t.co/A4EsXklbL7
— Binance (@binance) September 6, 2020
Ethereum is still the preferred blockchain among issuers as the top 15 DeFi tokens are operating on the Ethereum network and will lock up billions of dollars. The activity caused huge congestion with fees hitting highs of $60 per transfer. This could only be getting started especially if the markets attract billions from new users in China.