Defi farms opened with vampire attacks Poor stickiness of funds

In DeFi, capital is indeed profit-oriented.

Defi farms opened with vampire attacks Poor stickiness of funds

MasterChef.sol is probably one of the most forked contracts in DeFi. By forking, I mean copying the codebase with most of its functionality intact. The developer may change the name of one or two variables, but the architecture of the contract and its interface is essentially the same. The advantage of this is that developers can easily achieve their desired outcome, which is to issue token rewards, and the contract may be more secure, since it has been in use on Ether for some time.

MasterChef.sol, first deployed by Sushiswap in 2020 from the Uniswap brutal “bloodsucking” liquidity event, is a way to incentivize users with $SUSHI to lock assets (LP tokens) into it. To this day, this is a popular way for new projects to attract capital deposits. When ERC20 tokens are transferred in, the native platform tokens are released to users after they withdraw them.

  1. Method
    In this article, we did a summary analysis of all Masterchef contracts to see if we could gather any insights on yield farming activities on the blockchain. Let’s take a database of contracts that contain the word “Chef”. There are nearly 400 such contracts – let’s sort these contracts by the number of calls they make.
Defi farms opened with vampire attacks Poor stickiness of funds

Expectedly, Sushiswap’s Masterchef contract leads the way in terms of the number of contract calls. In this study, we will focus only on those contracts that have been called at least 500 times. We obtain this contract dataset to represent token deposits and withdrawals of tokens with token transactions to and from the contract. The flow of funds to the New Farm contract is studied here, so Sushiswap’s MasterChef contract is not included. This leaves us with about 28 “Chef” forks.

There are 2 assumptions.

  1. any token entering such a contract is considered a deposit
  2. any tokens moving out of the contract are considered withdrawals.

A sample size of about 40,000 farm entries and exits was obtained by examining the time difference between token transfers in and tokens finally moving out of the masterchef contract. These were initiated by a total of 33,882 unique addresses. With some analysis, we can find the time between a user entering and exiting a farm, as well as the time between the farm being deployed and the first entry of funds into the pool.

  1. Conclusion
    How sticky are the funds deposited in these contracts? Well, not much. The vast majority of farmers appear to have exited within the first 5 days of entering the farm, and half never stayed for more than 15 days.

However, 13% of addresses still keep their money in these contracts.

Defi farms opened with vampire attacks Poor stickiness of funds

The heat map below, presents a visualization of the relationship between when a user enters the farm and the duration of performing gainful farming activities. The results see that there does not seem to be a clear relationship between when users enter the farm and how long they stay on the farm. The rightmost data column is representative of the number of users who have not yet exited the farm.

Defi farms opened with vampire attacks Poor stickiness of funds

Here’s a more interesting statistic. A whopping 42% of revenue farmers who enter the farm on launch day exit within 24 hours. About 16% leave within 48 hours, and by the third day, 70% of these users will exit the contract. This is because the reward release rate (APR) typically decreases block by block, as well as the rewards are diluted over time as more users enter the farm. In DeFi, capital is indeed profit-oriented and users will spend their capital on other high yielding areas and never fall out!

  1. Smart income farmers
    Can we find those addresses that consistently get into the income farms early? There seem to be so few.

There are about 11 addresses that entered at least 6 Chef contracts within 5 days of the farm’s launch. This list is uploaded here as bullet points https://gist.github.com/yoitsyoung/49d8082627b48ceb9a0e9bee0ea26e63. To dig further using Nansen’s wallet analyzer, smart alerts can be set up to alert you to actions taken by these addresses .

Happy Alpha hunting with Nansen!

This article is from Nansen and was written by Ling Young Loon

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/defi-farms-opened-with-vampire-attacks-poor-stickiness-of-funds/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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