[daanavitch]

'Yield farming' has been very popular the past few months. Compound Finance was the first to kick off the hype by giving away their governance tokens to people that used their platform. You can compare it to Facebook giving you some of their stock by being an active user.

The end game of those governance tokens is for them to control the whole platform, so absolutely no changes can be made to the platform without being voted in by the token holders. All of this is enforced trustlessly on the blockchain through smart contracts. As a token holder you really own part of the platform.

This is a very powerful concept, so a lot of people are interested in buying those governance tokens outright. So what you can do is put your money in one of those platforms, receive governance tokens and sell them to people that want to buy them outright. You can make quite good money doing this.

Now a lot of projects popped up that basically had nothing to offer, yet people were still buying their governance tokens, meaning you could still make money by putting your money in there and selling those tokens to those people quick before those tokens became worthless, basically an advanced game of chicken.

So what I'm saying is not all of those 'stake your money and receive tokens' are outright scams. There are some very legitimate projects being built that give away governance tokens. Uniswap comes to mind, the most popular decentralized exchange, doing over half a billion in volume yearly. There's of course a lot more nuance and not everything works as it should yet, but there's a lot of interesting stuff being built every day.

[vvpan]

Half a billion daily you mean, hehe.

Glad to see informed comments, BTW.