A new yield farming application called Origin Ether has garnered over $12 million in Total Value Locked (TVL) just two weeks after its launch, according to DefiLlama, a blockchain analytics platform. TVL is a metric that measures the dollar value of assets within an app’s smart contracts.
The app was launched on May 16, 2021 and, according to the development team representative, already had $793,000 locked inside its contracts before the launch. Deposits to Origin Ether (OETH) grew rapidly, leading to a TVL of over $13 million by May 30, an increase of approximately $12.6 million in just 14 days.
Origin Ether generates yield from Ether (ETH) by depositing it into multiple liquid staking and decentralized finance protocols. It utilizes an algorithmic market operations strategy on Curve and Convex to maximize returns. Before being deposited to Curve and Convex, some of the ETH is converted into liquid staking derivatives, including Lido Staked Ether (stETH), Rocket Pool Ether (rETH), and Frax Staked Ether (sfrxETH). This strategy seeks to allow users to obtain additional farming rewards from these providers.
Liquid staking solutions are becoming increasingly popular as Ethereum moves towards proof-of-stake consensus and enables withdrawals. Liquid staking protocols allow ETH holders to stake their coins with a network of providers in exchange for tokens representing those deposits.
The increase in popularity of liquid staking protocols can be seen through the reported figures. On May 1, 2021, DefiLlama reported that liquid staking protocols had become the top decentralized finance category, surpassing the TVL of decentralized exchanges. Additionally, on May 30, 2021, cross-chain bridging protocol LayerZero partnered with the Tenet network to increase the use of liquid staking in the Cosmos ecosystem.
As the popularity of liquid staking solutions grows, it would not be surprising to see more applications like Origin Ether emerge. These solutions offer yields to users of those solutions; however, they do come with certain risks. One of the most significant risks is smart contract vulnerability, as smart contracts are an integral component of liquid staking solutions. Furthermore, any vulnerability in smart contracts could lead to the loss of user funds.
Despite the risks, yield farming and decentralized finance continue to grow in popularity, with more and more applications appearing in the market. TVL in decentralized finance continues to grow, with the current TVL hovering around $60 billion.
In conclusion, Origin Ether is a new application that has garnered much attention in the decentralized finance space. The app has accumulated over $12 million in TVL within just 14 days of its launch, using liquid staking and decentralized finance protocols. However, it is important to note that while the growth of liquid staking solutions might seem promising, users should remain cautious when investing in these solutions due to the risks they pose.