What is Vampire Attack? Liquidity Attractors in DeFi

What is Vampire Attack?

Vampire Attack is the fact that the platform was born after having different ingenious incentive strategies to motivate liquidity providers on older platforms operating in the market to accept their transfer to another platform. newly born.

Vampire Attack’s Mechanism of Action

This is the simplest mechanism of Vampire Attack:

Step 1 & 2: When users deposit token A into platform A (which can be understood as the platform born first) to receive LP tokens back.

Step 3 & 4: Platform B (the newly launched platform) will have strategies and strategies to encourage users to deposit LP tokens of that platform A into their projects with the reward being token B.

After the end of the Vampire Attack, the new platform theoretically succeeded in significantly increasing the liquidity, users and trading volume of the previously launched platform.

Some outstanding Vampire Attacks

Some examples of Vampire Attack stand out in the crypto market for you to have the best overview of this term.

Uniswap and Sushiswap

In a time when new DeFi projects are popping up pretty much every day, a new project called Sushiswap has launched.

Sushiswap (fork of Uniswap) is quickly gaining traction in the DeFi community as it aims to compete directly with Uniswap by taking away liquidity with a deterministic process.

• In the case of Sushi, Uniswap liquidity providers are encouraged to stake their LP tokens on Sushiswap, so that they can receive additional rewards distributed in SUSHI tokens.
• Sushiswap started with a rather aggressive issuance strategy for SUSHI tokens. 1000 SUSHI tokens per Ethereum block are distributed to Uniswap liquidity providers on different pools such as SNX-ETH, LEND-ETH, YFI-ETH, LINK-ETH.
• This DeFi idea was successfully used by Yam and is now adopted by Sushiswap Reuse.

Uniswap liquidity providers attracted by high APY from +200 – 1000%, started to move more and more of their LP tokens to Sushiswap. Hours after its launch, Sushiswap reached $150 million in TVL.

Many events happened, the yield farming process continued until Binance announced the listing of SUSHI tokens, when the price of SUSHI reached $15 and TVL reached $1 billion.

→ Sushiswap is clearly one of the projects that is the most prominent example of a Vampire Attack in the early DeFi space. Currently, the two platforms Sushiswap and Uniswap are one of the major platforms in the top 5 of the crypto industry.

OpeaSea and LookRare

OpenSea is an exchange of non-fungible token (NFTs). OpenSea will allow users to sell, exchange and trade NFTs assets. OpenSea is built and designed almost in line with current market trends, creating a large source of liquidity for a large number of NFTs in crypto & non-crypto. For a long time, OpenSea dominated the NFTs sector of the crypto market.

Still LooksRare was born after OpenSea. LooksRare is a community-first NFT marketplace that actively rewards traders, collectors, and creators for participating. LooksRare implemented an airdrop program at launch (120,000,000 million LOOKS accounting for 12% of total LOOKS token supply) to attract users from OpenSea.

LooksRare also applied the Vampire Attack strategy to OpenSea, using incentives like Sushiswap used with Uniswap, to attract attention from the community of NFTs users. But more than that, LooksRare doesn’t stop at the “fork” of OpenSea but also continue to develop more new features.

By deploying the LOOKS token when OpenSea has no token yet, LooksRare helps users (especially LOOKS holders) get more benefits than OpenSea such as: All the above transaction fees will be divided back to LOOKS Staker ( 2% on each NFT transaction), staking LOOKS also gets an additional reward.

→ For those reasons, at the time of writing this article, within the last 1 month, LooksRare seems to have surpassed OpenSea in terms of volume and revenue of the NFTs market.

X2Y2 and OpenSea, LookRare

X2Y2 – an NFTs marketlace that did vampire attack on the eldest OpenSea using the same tactics as LookRare did, is an airdrop to everyone who used OpenSea before January 2022 up to 12% of the total. supply my X2Y2 token ~ 120,000,000 X2Y2 token as well as then X2Y2 has launched a very high staking rewards strategy.

Learn from LookRare, X2Y2 Airdrops are easier for all users to buy/sell on the platform OpenSea. During the LookRare airdrop, only wallets that traded at least 3 ETH ($9,000) on OpenSea from mid-June to mid-December 2021 are eligible for the airdrop.

As soon as the airdrop, X2Y2 become the most traded token on Uniswap. The token has skyrocketed from around $1.14 on Feb. 16 to $3.83 (according to data from CoinGecko). X2Y2 has increased by about 74% in the last 24 hours.

→ Jobs X2Y2 debut performing vampire attack in time OpenSea There are rumors of being exploited, as well as LookRare, there is news that the development team has cashed out an amount of WETH up to ~$70 million, which has made the community lose confidence. That’s it X2Y2 has the advantage of a new NFTs marketplace with tokenomics that has been learned and developed from previous platforms as a premise for X2Y2 to surpass both OpenSea and LookRare in the near future. You can read X2Y2 tokens here

0xDAO and veDAO

veDAO and 0xDAO are two projects KNIFE (decentralized autonomous organization) was created with the specific purpose of being in the top 20 with the highest TVL projects in the Fantom ecosystem to be equally divided tick(3,3) from Andre’s project. Leading to the common strategy of both projects is to bootstrap TVL as quickly as possible → leading to the reappearance of the Vampire Attack war.

veDAO was born first, the power behind is the big KOLs on the Fantom system, veDAO is simply a farming platform that rewards users in the form of WEVE tokens. After 24 hours of launch, veDAO has attracted 1 billion USD TVL. Bring this project to easily reach the top 2 position of TVL on Fantom ecosystem.

0xDAO was born later, the force behind is an alliance from famous platforms in the system such as Spookyswap, LiquidDriver, Scream.

Realizing the disadvantage of veDAO tokenomics for users, 0xDAO quickly implemented an extremely fast Vampire Attack strategy on veDAO encouraging users to migrate (shift) tokens in veDAO to the format in 0xDAO.

With support with many assets of projects like Scream, Tomb, Liquid Driver,… in just 4 hours, 0xDAO quickly regained the top position on the DefiLlama rankings.

→ Result 0xDAO successfully executed Vampire Attack. However, by the time of writing, 0xDAO and veDAO have completely fallen out of the top 20 TVLs on Fantom, respectively.

→ By the time I am writing this article, both 0xDAO and veDAO have entered the veSolid war. While, born later, but 0xDAO stands out as the leader of an alliance when gathering other platforms to join its alliance, while veDAO joins another alliance (Solidex) as is a member.

→ What implements vampire attack strategies, but there are cases where both projects continue to exist and thrive in parallel (Uniswap and Sushiswapp). There are cases where the project has learned from the bad aspects of the previous project to use it as its own difference (X2Y2 and OpenSea, LookRare). Or is it the case that the project that implemented the vampire attack has completely eclipsed the previous project (0xDAO and veDAO)

Reviews about Vampire Attack

For the project perspective

Each piece of the crypto market has been and is having familiar and prominent names. However, the crypto market is still a young market with a lot of room for improvement, so it will still attract a lot of excellent human resources in the traditional market to join and build new projects and empires.

Therefore, on the same segment, there will be many new projects with innovative innovations to compete and develop with old projects.

→ Vampire Attack will be and more and more deployed in many other projects with more creative moves, not stopping at farming with APY/APR large, but also can receive NFTs that can be used in the following project roadmaps, or the right to participate in partner projects. Or NFTs representing early contributors to receive large airdrops.

From an investment perspective

Vampire Attack is an opportunity for investors to participate in making profits with new projects because vampire’s purpose is to attract liquidity from the community. With the hope that the first supporters of the project will receive the corresponding rewards.

However, you still have to carefully evaluate the business model, project team, … to avoid cases where new projects take advantage of the old project’s community to commit fraudulent acts. scam, appropriate the amount of tokens owned by the old project.

Epilogue

I hope this content will help you to have an overview of the keyword Vampire Attack in DeFi and some outstanding examples of it. If you have any other ideas, please leave a comment.

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