BakerySwap liquidity mining collapsed within a day! Netizens: Put in 1000 BNB, only 5 left when withdrawn

The second wave of liquidity mining project on Binance Smart Chain, Bakeryswap, started mining yesterday. Its token BAKE opened at a price exceeding $60, but later plummeted. At the time of writing, the price of one BAKE token is only $0.21, with the opening and collapse happening within a day.

Bakeryswap Collapses Within a Day

Following BurgerSwap, the Binance Smart Chain launched three liquidity mining projects yesterday (15th): Bakeryswap, ForTube 2, and Cream. Unexpectedly, Bakeryswap's token BAKE collapsed right after its opening. The token's price soared to over $60 at the beginning, but plummeted thereafter. At the time of writing this article, one BAKE token is now priced at only $0.2.

Additionally, since participating in Bakeryswap requires the use of BNB, there has been a surge in demand for BNB in the market these days. However, after Bakeryswap's mining launch, there was a significant drop in returns, far below the expected levels. Farmers who no longer wished to participate began selling off the BNB they had previously purchased for Bakeryswap liquidity mining. This ultimately led to BNB dropping rapidly from its peak of $33 to $28, a 15% decrease.

Profits from Interest, Losses from Principal

For those participating in Pool 1, they face the risk of a decline in tokens such as ETH, BTC, DOT, LINK, and BNB. Therefore, the collapse of the BAKE token only means a significant decrease in mining profits for them, rather than direct losses. However, participants in Pool 2 were not as fortunate.

Pool 2 refers to the liquidity pool for the BAKE-BNB trading pair. Typically, mining rewards in Pool 2 are much higher than those in Pool 1. Taking Bakeryswap as an example, the mining rewards in Pool 2 are 3 to 10 times that of Pool 1. If BAKE continues to rise, participating in Pool 2 can generate substantial profits. However, when the price of BAKE keeps dropping, BNB in Pool 2 is continuously exchanged for BAKE, meaning that the BNB collateral of participants diminishes over time, resulting in them holding a plethora of cheap tokens (BAKE). In this scenario, the farmers turn from farmers into bag holders.

According to a report by Chinese media, a netizen who participated in BakerySwap Pool 2 mining lost $3000 within just one hour of entering the pool.

Furthermore, a Chinese netizen claimed that they bought 1000 BNB to participate in Bakeryswap Pool 2 liquidity mining, but ended up with only 5 BNB when they exited.

Whether these netizens' claims are true or false remains unknown, but what is certain is that in such a massive collapse, no participant in Pool 2 was spared. Reportedly, after the price crash, users found that Binance founder Zhao Changpeng quickly distanced himself, deleting his previous tweets related to Bakery, while the users who suffered losses organized a rights protection group to seek compensation from the project team and Binance.