Thread by @hufhaus9

We've started building a position in the @redactedcartel project, $BTRFLY 🦋. Here's why.

Huge props to @knowerofmarkets. Links throughout.

1. First you need to understand that all big DeFi protocols (@MIM_Spell, @FantomFDN, @CreamdotFinance) are playing a game -> they want as much VOLUME (TVL=total value locked) as possible. Why? cos fees init bro. At the same time, guys like me want the best % return on stables.

2. That's where Curve ( $CRV ) comes in - it's THE dominant marketplace for stablecoin swaps (managing treasuries etc). Curve is where ALL the action takes place. There is no second best.

3. For every trade that occurs on Curve, liquidity providers earn a percentage of fees in the form of CRV tokens.

4. Those who have earned CRV also have the option to “vote lock” their tokens, giving them even more CRV - veCRV (vote escrowed Curve).

5. veCRV isn’t just your ordinary LP token. This is a governance token, used to provide a vote in whatever important matter has been proposed for Curve. This could be a change in one of the many pools, a proposal of a new pool or a change in gauge weight.

6. Furthermore, the holders of veCRV are able to receive “bribes” from protocols in return for voting for a protocol’s pool. This allows users to be happy and earn some extra coins, while those in pursuit of veCRV obtain more votes.

7. Many different players in this game all share one goal: for their coin or protocol to be number one, with the most traffic directed their way. For them, having an influence on Curve is absolutely necessary for survival.

8. Now, Curve conducts these weekly governance votes to determine the allocation of CRV rewards to the various liquidity pools on its platform. It’s these votes that the DeFi protocols are after since they directly impact the yields they can offer to their users

9. For example, bribes have been offered by many of the big DeFi protocols. I.e. DeFi projects bribe veCRV holders with (native) token rewards in exchange for their votes.

10. Then along came Convex ( $CVX ). Convex changed the game for good, with a very simple model for obtaining veCRV. Why go through the hassle of getting it yourself, if you can simply get users (like me) to give their veCRV to you? (in return for even better yield/rewards)

11. And it's worked, so far Convex owns over 51% of the circulating supply of CRV! Protocols determined there was no way to accumulate enough $CRV to beat out the behemoth known as Convex, so they resorted to the next best thing -owning $CVX.

11. Convex aren’t the only players in this war-game. (Olympus DAO, Yearn, Frax, Abracadabra, Terra) have all recently moved into battle with one goal in mind - accumulate $CVX in order to inevitably acquire $CRV governance.

12. Collectively this is known as "The Curve Wars", and I highly suggest you read this, like NOW:
theknower.substack.com/p/the-mythos-o…

13. So what does @redactedcartel and $BTRFLY have to do with all this? Well, they have set up an Olympus Dao style bonding system to acquire as many of these governance tokens as possible ( $CRV, $CVX ). That hoovers up supply, and they can apply yield strategies to their assets

14. Meanwhile, minters and stakers like $ReFi will benefit from the APY and rebase mechanism

15. So like @BillyBobBaghold notes:

"@redactedcartel will soon control the casting vote for all large defi protocols. That’s going to be worth a lot more than the nominal value of its treasury"

https://twitter.com/BillyBobBaghold/status/1474184143839928325?s=20

16. I want $ReFi to own some of that!

theknower.substack.com/p/the-curve-wa…

I mean, you could research all this yourself, hang out in the discords, participate in the DAOs and ask away at the AMA's ..... or perhaps, just buy $ReFi ?