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Donkey Finance Review 2021 - Is Don-key.finance A Scam?
Don-key.finance is a new social yield farming platform for the crypto community which made news in April 2021 for raising $2.2 million in private funding from venture capitalists. Also, in Q2, it launched on a major launchpad with respected protocol integrations from Pancake, Venus, bDollar, AutoFarm, and Beefy.
Don-key.finance’s raison d’etre is to provide a user-friendly yield farming experience in a gamified DeFi (decentralized finance) environment where farming is accessible to both newbie farmers who aren’t capital-heavy and turbo-funded pros alike. But, did they really pull it off? In this Don-key finance review we look at the project in detail and share some of the strengths and weaknesses of this platform.
Don-key has not yet managed to successfully launch a strategy builder, and with only a handful of strategies available, it has a very limited scope for yield farmers hungry for generating high yield. A project that seems to offer far more customization tools, yield farming strategies, and overall a safer way to invest is Weave.
Don-key.finance’s mission is:
- to provide a place for newbies to find established farmers that they like and copy their strategies to generate crypto profits and earn tokens
- to provide a platform for investors to add liquidity to farmers’ accounts, have farmers trade on their behalf, and earn tokens
- to provide a place for farmers to create highly personalized profiles reflecting their farming philosophies, raise liquidity, and trade on behalf of liquidity providers
Again, the idea is that the above activities happen in a gamified DeFi setting where there’s participation and interaction on the platform, actual profits realized, rewards given, and incentives won.
|✅ Easy To Use||❌ Data Can Be Slow/Inaccurate|
|✅ Convenient For Tracking Your Portfolio||❌ Recently Acquired By FTX|
|✅ Free To Use|
What is Yield Farming?
As yield farming is a somewhat new concept, it’s worth examining what the term means. It might not be clear for those who haven’t been following DeFi closely in recent years.
In the DeFi world, yield farming is, according to Werner Vermaak on coinmarketcap.com, “the practice of staking or lending crypto assets in order to generate high returns or rewards in the form of additional cryptocurrency.”
Brady Doyle, on coindesk.com, calls it, “a shorthand for clever strategies where putting crypto temporarily at the disposal of some startup’s application earns its owner more cryptocurrency.”
Bees.social educators write that yield farming, “also referred to a liquidity mining, is when users stake their cryptocurrency assets in liquidity pools for crypto token rewards.”
At its most basic, yield farming is taking actions with a set amount of crypto to leverage it and generate more of it, or to generate crypto tokens (similar in model to traditional investing in centralized finance governed by banks and institutions).
In tokenized yield farming, the earning of tokens is a way to realize an additional kind of yield on a deposit. How it works is that a farmer puts x amount of crypto into a DeFi protocol (like Don-key) liquidity pool and earns tokens for that deposit. He or she can use those tokens in different ways, sometimes across multiple protocols, to realize additional gains.
So then a farmer ends up with returns from the performance of his or her invested crypto but also with gains from tokens earned through deposits and other ways.
DeFi protocols create their own tokens (Don-key created the $DON token) and work to attract farmers and investors to their platforms. They need farmers and investors to build up liquidity pools so that there’s more capital on which to trade and generate higher profits.
At this writing, the Don-key.finance protocol is enjoying market capitalization (“market cap”) of $1.53M and is actively recruiting new Don-key holders to add to the liquidity pool and make the whole thing a major player in the DeFi yield farming space.
Now, what is social yield farming?
Social yield farming is the practice of yield farming carried out in a gamified environment. This is what Don-key.finance has created and is attempting to make a going concern. As mentioned above, the project is in beta.
Don-key.finance’s home page makes it feel like the whole thing is a game. Is this an investing platform? Nah, it’s fun and social! Even the vocabulary makes it sound like a social platform or a multi-player online game: “Find your favorite farmers. Follow their strategies. Boost your yield. Unlock multiple layers of access.”
Scroll down and it sounds a bit more investment-oriented but still accessible, incentivized, and fun:
- “Create complicated strategies with 0 code.”
- “Climb up the leader board and get more liquidity in your pool.”
- “Make commission on your yields.”
- “Get extra bonuses on your ranks and performance.”
And then there are the DON tokens, which, besides being normal DeFi governance objects, on this protocol also carry the connotation of a game piece like you’d find on a traditional video game–Rustbit tokens on Age of Rust, for example.
Is Social Yield Farming on Don-key.finance legit?
From where we stand, we’ll say, “Lookin’ good.”
Copy Farming Made Simple
The key features outlined in Don-key.finance’s lite paper appear solid, beginning with the Copy Farming product with which newbies can learn about farming and anyone can auto-invest. Top farmers can be explored and followed. You don’t need a Ph.D. in the field of cryptocurrency to use this platform. Yield farming seems to be actually accessible.
Easy Strategy Building
Don-key’s strategy builder allows farmers to build their farming strategies much the same way they’d build a website or an online game–through a drag-and-drop 0-code visual interface that allows for easy planning and optimizing.
Automate take profit/stop losses and cash out conditions. Integrate with cross-chain protocols and auto reinvest harvested profits. Again, the accessibility here looks legit.
Check Out Players’ Cred
Farmers and investors have transparent reputations. Trying to decide which farmer to follow? You can see their profile with their APY results and historical track record. Investors also earn a reputation within the platform. (Farmers don’t have to disclose the blueprints of their strategies. Performance metrics are visible, though.)
We think that the built-in transparency of all players bodes well for the viability of this platform.
Good Farming Incentives
The protocol has to work for farmers or the whole thing will fall apart. (“We believe that yield farmers are at the frontier of the DeFi revolution,” say the developers.)
Don-key.finance looks like it has attractive incentives in place to retain farmers and attract quality new ones so that the market cap will keep increasing. The farmers can build and optimize multiple strategies and then gain commissions from the yield of those strategies. They can raise liquidity and trade on behalf of liquidity providers. Fees are minuscule for transferring liquidity.
Wrapping It Up
Only time will tell if Don-key.finance’s experiment with social yield farming is legit and workable. Still, we’re optimistic. Given the ongoing global obsession with online gaming, the exploding fascination with crypto, the inexorable drive to grab the edge (liquidity and mining), plus everyone’s FOMO (they’re getting rich and I’m not!), a platform like Don-key that makes all the above possible for the average joe seems like, well, an idea whose time has come.
Is social yield farming legit? We think so. Let’s all check back in a year or three!
I’m Jon, owner of Trade Wise at https://tradewise.community/ and https://www.youtube.com/channel/UC7VmOx8DbvX4Rbrac2pPcjw
I review forex and crypto trading products and services to find the best of what’s out there for creating a passive income without becoming a full-time trader.