Crypto Analytics #2: WOOFY - The First Useful Dog Token?
The one where I take a meme too seriously.
See Crypto Analytics #1: Exploring Uniswap v3 Data here
As part of this analysis, I contributed to Issue #72 of the ‘Our Network’ newsletter. Check it out! https://ournetwork.substack.com/p/our-network-issue-72
On May 11, 2021, Yearn Finance, the largest crypto yield aggregator (automated deposit, withdrawal, reinvestment strategies) introduced the WOOFY token, which tested two ideas:
Unit Price Psychology: Yearn’s YFI governance token was one of the higher-priced per unit assets (~$75k for 1 YFI on May 11), but YFI holders could exchange YFI for WOOFY at a 1:1M rate (i.e. if 1 YFI is $75k, then 1 WOOFY is $0.075)
Dog Meme Coins.
YFI ran up to an all-time high of $90k a few hours after WOOFY launched, which led to my questions: Is this real? Is this a meme? Is this an innovation in growth marketing?
It’s time for dashboard #2, follow along here: https://duneanalytics.com/msilb7/YFI-WOOFY-(WIP)
Note: I hold YFI.
Who is holding this dog token?
This was my first question. WOOFY holders (addresses) already made up 9% (3.2k) of all addresses with Yearn exposure (YFI or WOOFY) even though WOOFY only makes up 0.7% of Yearn’s market cap. So, is this the Yearn community having fun, or a new set of people that see a dog token and buy it?
The answer: A little bit of both. 84% (2.7k) of WOOFY holders have never ever held YFI. But, the 15% of WOOFY holders who previously held YFI make up 59% of the total USD Value of WOOFY. So, this WOOFY-only group either decided that they finally wanted to buy into Yearn’s ecosystem via a smaller unit price… or they wanted a dog meme.
But, what seems like a meme on the surface could actually be an opportunity for Yearn. They brought in 2.7k new holders essentially overnight (1/10 of their holder base), and that’s just on the Ethereum network. So far, only 17 WOOFY-first holders have converted to also hold YFI in the same wallet. But maybe that’s the opportunity: If WOOFY can somehow funnel new holders and community members into the Yearn ecosystem, what can Yearn gain from that?