Summary
MEV Capital, a DeFi-focused hedge fund, is now utilizing points farming to gain exposure to projects like EigenLayer and other Ethereum restaking protocols. Points farming involves accruing points for interacting with protocols, which may lead to future token payouts. While some funds are skeptical of the risks involved in points farming, others see it as a lucrative opportunity. Points farming is considered more of an art than a science, with potential returns being uncertain and opaque. Overall, the potential upside of points farming remains attractive to clients and investment firms like MEV Capital.
Key Points
1. MEV Capital, a DeFi-focused hedge fund, has incorporated points farming into its strategy to earn rewards for clients by interacting with protocols that offer future token payouts.
2. Points farming is particularly popular in the restaking sector, with EigenLayer and other Ethereum restaking projects offering off-chain points to on-chain users, leading to a surge in total value locked in EigenLayer from $250 million to over $9 billion.
3. While points farming can be lucrative, it is also risky as the future value of the points is unclear, making it more of an art than a science to determine returns. Larger investors may receive lower rewards from points farming, as the tokenomic structure often favors smaller allocations.