Yearn Finance Taps into Crypto's Unit Bias With Woofy Token
In a test of unit bias in crypto, Yearn Finance’s Woofy proves that DeFi tokens’ value depend on two things: price per coin and proof of dog.
- Yearn Finance released “Woofy” as an experiment to see if unit bias hindered the value of its YFI token.
- Since the release, YFI has seen a sharp rise in its price and Woofy is in the top 10 most traded coins on Uniswap v3.
- Yearn’s team is currently working on bridging Woofy to other networks such as BSC or Polygon.
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Woofys can be created by “woofing” YFI tokens into WOOFY at a rate of 1:1,000,000. Since the release of the alternative token, the price of YFI saw a swift rise to new all-time highs.
Yearn Launches Same Token, Just Smaller
A common critique of Yearn Finance’s YFI lies in the dollar price of the token. As only 36,666 tokens exist, the price per coin can seem too high for some retail investors.
This phenomenon is known as unit bias, as the price per coin shouldn’t factor into the decision-making process of any investor. The coins represent a percentage in ownership of the protocol’s entire supply; the actual number of coins doesn’t matter.
Yearn Finance decided to put unit bias to the test by releasing Woofy as an alternative token to YFI. This doesn’t add any supply to YFI but rather represents a converted version of YFI tokens in much smaller units. The name Woofy comes from the current trend of dog-named coins started by the rising popularity of Dogecoin.
Since the release of Woofy, Yearn’s YFI has seen a sharp rise in price up to $90,000, more than a 40% increase in a few days. Woofy is currently trading at $0,08 and managed to be part of the top 10 most traded coins on Uniswap’s new v3.
Woofy is now sitting on the first page of Uniswap V3 with more liquidity than Shiba Inu. pic.twitter.com/IHf6jNT8I8
— banteg (@bantg) May 12, 2021
Banteg, one of the developers behind Yearn, has also announced Woofy would soon be available on other compatible networks like BSC or Polygon.
Disclaimer: The author held ETH, BTC, and several other cryptocurrencies at the time of writing. Andre Cronje, the creator of Yearn Finance, is an equity investor in Crypto Briefing.