Fire up your tractors: The farmer’s almanac of decentralized finance is indicating that DeFi Summer 2.0 could feature some healthy yields across the ecosystem. 

Multiple common metrics used to gauge the health of the DeFi space are pointing toward a looming bull market, but perhaps most promising of all might be the surge in Curve’s CRV governance token price.

Often referred to as one of the “backbone” protocols of DeFi, Curve is an essential tool for many retail and protocol-level yield farming strategies. Curve allows for low-cost, low-slippage swaps of similar assets — for instance, swapping between different stablecoins such as Dai, USD Coin (USDC) and Tether (USDT) — and users who deposit liquidity into Curve’s pools get trading fees as well as CRV governance token emissions as a reward.

As a result, the protocol is the seventh-largest by total value locked per DeFiLlama, with $6.49 billion in assets, and functions as the primary yield-bearing protocol leveraged by yield vaults like Yearn.finance.

Reading the stars, testing the soil

If the price of CRV can be used as an indication of how many common farming strategies will perform in the coming months, then the summer is looking to be bright green. 

CRV is up 4.6% on the day to $3.94 at the time of publication — part of a month-long rally carrying it 51.1% higher, per CoinGecko.

Part of the rally is fueled by CRV’s tokenomics. CRV holders have the option to lock their tokens for a four-year period in exchange for veCRV, which grants them access to additional protocol fees and boosted yields. Likewise, as the rest of DeFi rallies, as a top protocol, CRV prices should drift upward as well.

However, veCRV holders have also been the recipients of a number of lucrative airdrops as of late. Ellipsis, an “authorized fork” of Curve on Binance Smart Chain (copying the protocol down to the frontend, which is reminiscent of Windows 98), airdropped an initial round of EPS tokens to veCRV holders. Likewise, Convex Finance, a forthcoming platform aiming to “simplify staking on Curve,” has also announced an airdrop to veCRV holders, though the details of the drop have not yet been released.

Airdrops can often be a tricky affair. Protocols want to attract governance token holders who will be loyal to the project and provide informed votes. While in many cases that means distributing to wallets that formerly and frequently interacted with a protocol, with upstart projects building on the backs of others, distribution parameters can instead be intended to attract an especially knowledgeable community — and veCRV holders fit the bill.

In the end, it has the potential to create a virtuous cycle for all of DeFi: Speculators buy CRV to convert to veCRV in the hopes of receiving an airdrop; CRV’s price rises; DeFi’s yields grow fatter.

Bountiful good news

As the fate of CRV and the strategies that depend on it for yield play out, a host of other metrics are pointing to a strong summer for DeFi. 

DeFi’s TVL figure currently sits at $123.29 billion, having climbed another $20 billion after eclipsing the $100-billion mark just last week. Even as the wider market pulls back after an exceptionally strong Thursday, multiple DeFi projects remain green on the daily and weekly, such as Curve and Compound, and OG projects like Maker are on a tear, with the MKR token eclipsing $4,000 for the first time yesterday.

The surge has multiple observers praying for a “DeFi Summer 2.0.” While throughout the winter and spring, a handful of DeFi Gen 2 tokens managed to overperform, and the sector looks to be the recipient of a strong rotation into older, established projects. Last summer, the space took off in a major way — but was also marred by a spate of hacks and exploits.

Ultimately, however, the greatest sign in the stars for DeFi (as well as the larger market) is the performance of a joke: Dogecoin (DOGE). 

The meme currency is hungry for blood, eclipsing five-digit gains on the year at 12,600%. Traditionally, when the Shiba Inu runs, other altcoins follow — another bellwether pointing toward a bumper DeFi harvest.