The latest high-yield, food-flavored DeFi meme project, Hotdog, appears to have crashed and burned just hours after it was launched.

The newly cloned DeFi protocol called Hotdog promised insane returns up to one million percent APY in order to lure liquidity providers. It is yet another doppelganger of the popular token swap and liquidity platform Uniswap, and follows in the footsteps of the recently launched Sushi and Kimchi platforms.

HotdogSwap was launched on September 2, and provided a largely illiquid token which surged in price to over $5,000 according to the Uniswap analytics dashboard, According to the HotdogSwap dashboard, that token is now worth $0.0332 at the time of writing.

A Reddit post shows how the token crashed from $4,000 to $1 in just five minutes. Twitter users such as ‘lowstrife’, and ‘Ivan on Tech’ posted about the huge dump.

Trader Edward Morra likened the crash to Bitconnect, posting examples of other spurious DeFi tokens that have taken a dive over the past 24 hours.

Similar to Sushi, Hotdog allowed liquidity providers to deposit Uniswap liquidity pool tokens to earn HOTDOG tokens which would entitle users to continue to earn a portion of the protocol's fee, accumulated in the token, even if liquidity provision was withdrawn.

This cloned yield farming frenzy was instigated by Yam Finance, a clone of YFI which was the first to offer liquidity pools rewarding providers with the notion of 100% community-owned tokens. This opened the floodgates for other copycats of existing DeFi protocols such as Uniswap, to start their own websites, and generate their own often food-themed meme tokens to be offered as rewards.

Anyone can list a token on Uniswap so the market is created there by providing the new token and some ETH to give it initial liquidity. In her latest Defiant newsletter, industry expert Camila Russo adds;

“By controlling the supply of ETH relative to the token, they’re also able to set an inflated price for a highly illiquid token.”

DeFi traders that flock to these new insanely high yield offering projects are known as degenerate farmers or ‘degens’. They drive token prices up initially which also pushes up the yields. Cashing out quickly, as appears to have been the case with Hotdog, nets a big profit for a few while the rest get burnt. Many compare the projects to ponzi schemes, or pump and dumps.