Copycat Goes Live! The latest liquidity mining project "Kimchi Finance" resembles a YUNO clone, locking in funds reaching up to $500 million at one point.

Although Ethereum Gas Fees hit a record high yesterday (9/1), reaching 488 Gwei at one point, this doesn't seem to deter the DeFi craze. The latest DeFi protocol, KIMCHI FINANCE, locked up nearly $500 million in value just within a few hours of its launch.

Kimchi Finance

According to the description on KIMCHI's official website, it is the latest liquidity mining project derived from the replication of SushiSwap and YUNO. Users providing liquidity for trading pairs such as KIMCHI/ETH, ETH/USDT, USDC/ETH, sUSD/ETH, BAND/ETH, YFI/ETH, etc., on UniSwap can earn Kimchi tokens (KIMCHI).

At the time of writing, the price of Kimchi token is around $7.29, and the annual percentage yield (APY) for participating in liquidity mining remains quite attractive.

Despite initially locking in nearly $500 million in assets, the total value has since been decreasing, with the main fund pool KIMCHI-ETH now having only about less than 17,000 Ether left. While Kimchi's protocol code is based on YUNO and Sushi, Sushi's overall liquidity continues to rise, and recent protocols also support liquidity mining with SushiToken. It seems Kimchi is unable to replicate Sushi's success.

Lack of Transparency in Project Information

As of now, with the DeFi craze and Ethereum's price surge, DefiPulse data shows that the total value locked (TVL) is nearing $10 billion, reaching $9.54 billion. This indicates that users are willing to take on significant risks to participate in the latest liquidity mining projects. Etherscan data also shows that Kimchi Finance's staking pool ranks fourth in terms of fees, with fees accounting for 2.83% in the past day.

In addition to quickly launching by copying code, Kimchi's own protocol has not been audited, and its interface is strikingly similar to YUNO.

YUNO is also an unaudited project, and previously Discord community user "sadcat" and blockchain security firm PeckShield have pointed out significant security concerns with YUNO, including malicious backdoors in the code that allow the project team to profit from unlimited issuance.

Furthermore, Kimchi Finance has not provided much explanation and even jokingly stated, "KIMCHI could be the next hot DeFi mining token. Who knows?"

In reality, the frenzy of achieving high yields through liquidity mining by issuing new tokens and speculating on token prices is too extreme. Despite the heat in the Ethereum ecosystem, founder Vitalik Buterin is not particularly pleased and even hopes this craze will end soon. He believes that these DeFi protocols are more exaggerated than the unlimited money printing policies of central banks worldwide.