Food-related DeFi projects have slowly taken over crypto in the last quarter, with many of these projects suffering from controversial issues such as the Uniswap fork, SushiSwap’s vampire attack and the market dump on Ether (ETH) worth $ 13 million by the lead developer. Chef Nomi.
Then there is the infamous Hotdog DeFi coin, which dumped 99.9% hours after listing. These fast-paced pump and dump-style projects have the capacity to give DeFi a bad name, but a closer look at the list of food-themed projects shows that not all offerings are rotten.
On September 11, a new project called Pickle Finance emerged from a pantry filled with food-themed DeFi tokens. The project works like other popular DeFi protocols that reward users who deliver high-interest liquidity and additional token rewards.
To date, the project has earned more than $ 347 million in total value, and one of the primary liquidity pools offers up to 4,500% APY.
The project aims to bring price stability to the four largest stack coins in the crypto sector, and it has rapidly risen to become the 1
Demand for the project is also reflected in the platform’s native token, (PICKLE), which quickly rose from $ 4.41 on September 12 to $ 70.21 at the time of writing.
‘Off point bad, on point good’
The Pickle Finance protocol allows users to earn interest and PICKLE, Ether and stablecoin pairings as a reward for providing liquidity to DAI, USDC, USDT and sUSD. While doing so, the seemingly Rick and Morty-inspired project aims to fix sticks on these stack coins, which have often fluctuated several percentage points above their stick throughout 2020.
As such, more rewards are given to stack coins below point and less to stack coins above point, which encourages users to buy and bet the former and to sell the latter. This system seeks to balance market conditions that push stablecoins stick away from their underlying asset and thus put them in the right direction through an incentive structure.
On September 16, Pickle.Finance also introduced pJars (formerly known as pVaults). Based on Yield.Finances yVaults, pJars will use deposited funds for arbitrage between stablecoins and utilize multiple protocols to provide rewards to token holders and further push stablecoins against their stick.
Pickle Jars can pump the token price
The pickle token has seen huge returns in its first week of trading with approximately $ 50 million in daily volume recorded in the days after launch.
Like other government brands, the Pickle Token can currently be used to vote on community proposals through a unique quadratic voting mechanism that reduces the control whales have over most decentralized management systems. The unusual operating system has even caught the attention of Vitalik Buterin, founder of Ethereum.
One challenge that many of DeFi set-ups face is liquidity providers withdrawing all their funds and moving on to the next lucrative farming project when the high APY rewards for their current plantation end. This is a reality and challenge that Pickle Finance may have to contend with as the high APY pools are set to “mature” in the coming days.
It is possible that the addition of rewards through pJars will have a positive impact on the token price, and similar models have proven effective with projects such as Aave and Yield.
In addition, the rewards come from the fees applied to pJars, of which 1.5% will be used to purchase Pickle tokens and to burn them. This reduces the overall token supply and should in theory help stabilize the price of Pickle.