NEO founder Da Hongfei has been following in Binance’s footsteps and actively shilling the platform as of late:
The total value locked participating in Flamincome/Flamingo has surpassed 1.6 billion USD. $FLM pic.twitter.com/JrMgU8LxEQ— Flamingo Finance (@FlamingoFinance) September 28, 2020
Cinneamhain Ventures partner and DeFi industry expert Adam Cochran has labeled the move as a vampire attack on Ethereum. His Twitter thread started off by pointing out that NEO experienced a recent outage with transactions getting ‘stuck’ on-chain:
$1M Question: how to estimate the valuation of a project which: 1) is the biggest non-ethreum DeFi of $1.3b TVL 2) full-fledged with cross-chain, swap, synthetics, perpetuals in the pipeline but yet to deliver 3) had glitches on day one's fair launch— Da Hongfei (@dahongfei) September 27, 2020
Cochran also pointed out that Flamingo is highly centralized due to its involvement with two of the largest companies in crypto, Binance, and OKEx, adding that 50% of the emissions of their new ‘DeFi’ system go to NEO, BNB, and OKB holders. He commented that any liquidity that does go into FLM will return as there is little point holding ETH in an alternative network where it cannot be used; “This is the most sophisticated ETH attack we’ve seen and it’s an utter flop.” Another factor that Cochran did not mention is the prevalence of yield hopping, which results in the same money continually circulating around the DeFi ecosystem and flowing into the latest and greatest thing only for liquidity providers to move on once earnings dry up. This has been most notably seen with SushiSwap and Uniswap. At the time of press, FLM was trading at $0.83 after hitting a top of $1.19 on Sept 28. NEO is currently trading hands for $19.90, down 23% from its September high of $26.
1/3— Adam Cochran (@AdamScochran) September 28, 2020
Was going to write a piece exploring the risks of $NEO's attempted vampire attack on $ETH so I decided to give it a try.
Forgetting the fact that just last week NEO had a >45 minute outage, my cross chain transaction has been stuck for 5 hours.
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