Thread by @crypto_klay

1/ Part III: Spirit War caveats, TVL, MAJOR weekly updates & evolving market situations…

I’ll outline:

- Notable differences between Curve / Spirit Wars
- Perspective on TVL short/long term
- Major Announcements
- Impactful/evolving situations to watch (stables)

2/ If you’re new to this series, welcome!

I’d recommend you get up to speed by reading Part I of this thread linked below:

https://twitter.com/crypto_klay/status/1475996013643149312

3/ Additionally, it would only make sense to read part II once you complete the aforementioned step (part II also linked below):

https://twitter.com/crypto_klay/status/1477346893680185346

4/ Before diving in please keep in mind this is an evolving situation IRL and it’s moving QUICKLY. As such, to connect the dots, I'm making some speculative points throughout. This is my interpretation of the situation today.

How it evolves is what we're interested in most!

5/ Addressing the differences between $CRV & $SPIRIT seems the right place to begin. These could affect the long term outcomes in the evolving SpiritWars…

Primarily:

1. The differences in the protocols focus CRV vs. SPIRIT
2. Total TVL today + impact

6/ The foundation of the Curve Wars was predicated on Curve’s primary objective in DeFi

They are crypto's unrivaled/primary stable swap AMM

This lead to massive protocol TVL and a race to control the gauges of @CurveFinance LPs to influence liquidity direction via governance

7/ Additionally, @CurveFinance has successfully accomplished their primary objective ACROSS chains. They currently have more TVL on #Fantom than @Spirit_Swap does as a whole...

8/ The point being made is their protocols product focus created a total TVL of 24.2BB (aka: immense liquidity)

The scalability of daily fees, plus impact on LP liquidity direction is what prompted the Curve Wars. They’ve dominated stable swap AMM with little competition...

9/ So, is it a necessity for an AMM/DEX to mimic $CRV stable swap model to achieve huge liquidity?

Thus, making LP control important enough to bring The Spirit Wars to monetary velocity…

Honestly, it’s unclear. But, this is an important difference that we can't overlook!

10/ Currently only @beethoven_x offers a flavor of stable pools on #Fantom (to my knowledge).

As a Balancer V2 fork, it's hard to estimate how much of their focus is on this segment of the DeFi. But they seem uniquely positioned here...something to watch moving forward.

11/ All of this leads to an obvious next point:

@Spirit_Swap long term focus will be on TVL growth throughout 2022…

They are actively in TVL competition with other DEXES on Fantom like @SpookySwap. As referenced here:

https://twitter.com/killakween444/status/1476178204310138880

12/ In these wars (Curve or Spirit), lower TVL = lower influence of scalable liquidity on LPs/gauges (+ less transaction fees).

Directing liquidity via LP gauges fuels protocols/DAOs interest in owning as much $veCRV (or $inSPIRIT) as possible. Control via governance…

13/ So, is this cause for long term concern?

Perhaps the Spirit Wars would not be as impactful as previously illustrated in thread Part I and II due to less liquidity?

Let’s dig into some information we have available to analyze on this...

14/ We talked about @Spirit_Swap changes:

1. Transition to a DAO (governance)
2. Migration to Boosted Farms
3. Generating demand acceleration for $inSpirit via smart tokenomics

These are hugely important. Also important, @Spirit_Swap clearly has more innovation upcoming!

15/ Looking at @Spirit_Swap medium article

“​​What is the future of SpiritSwap? What are we working on?”

There is murky ALPHA on “non disclosed projects” that will have a direct impact on volume, liquidity and thus, TVL for @Spiritswap…

16/ Further, if you listened to @b05crypto and @Spirit_Swap recent podcast…

There was a section that they literally went to elevator music to discuss the upcoming product developments.

Behind the scenes ALPHA, much?!?

podcasts.apple.com/us/podcast/mis…

17/ Obviously, we don't have the detail here, so it's a bit of a wait and see.

BUT, it’s clear that @Spirit_Swap has big plans to increase TVL quickly...

I believe in the team. We have redacted ALPHA that I can't help but feel bullish over. Now, we wait to learn more soon...

18/ Beyond this, I’m seeing some other bullish indicators develop for @Spirit_Swap, which would drive more demand for their $SPIRIT token to be staked as $inSPIRIT by other DAOs/protocols…

Time to revisiting the 3 token acquisition possibilities:

https://twitter.com/crypto_klay/status/1477348049210920963

19/ Admittedly, it seems I was off was in my original thesis/hypothesis from thread part II (shown above):

I sleep knowing I did my best 😂

I’ll explain what I mean here and it’s not a bad thing…Rather seemingly a very positive demand driver long term.

20/ So, where was I off?

My assumptions were a bit premature...

The main difference is that @ConvexFinance had already taken 51% (majority) control of $veCRV voting

Thus, the smart move by protocols/DAOs was to acquire as much $CVX as possible to control $veCRV governance

21/ In thread II I made the assumption protocols would imminently be replicating $CVX acquisition strategies to acquire $LQDR tokens

They would do this because of @LiquidDriver existing control of $inSPIRIT, which we should again point out is SIZABLE

https://twitter.com/LiquidDriver/status/1480247412937707529

22/ However, with a circulating supply of 305MM $SPIRIT and 500MM left to mint, is the race for majority $inSPIRIT control already called?

Could we see protocol competition vs. @LiquidDriver?

At a minimum could we see increased demand for $SPIRIT by other players?

23/ Maybe you see where I’m going here…

If the race is not yet called, then there is still ample time for other protocols to acquire $SPIRIT and mint $inSPIRIT…

Before having to go immediately after $LQDR 's % of governance control…

24/ I’m seeing breadcrumbs indicating the 3 scenarios outlined are being aimed at acquiring $SPIRIT.

Seemingly, this is because there is no majority controller of $inSpirit (yet)

This could accelerate until we have a clear cut governance controller. Bullish for @Spirit_Swap

25/ Let’s outline some new/ongoing cross chain developments I'm seeing that MAY lead to increased demand for $SPIRIT, generating competition for $inSPIRIT control...

After all, it wouldn’t be called Spirit Wars if there weren’t other players vying for a piece of the pie!

26/ Placing massive market buys with protocol treasury funds:

@WartuII, at @OlympusDAO posted that @OlympusDAO recently acquired 1MM $SPIRIT

The $SPIRIT have since been locked for $inSPIRIT (see comments). I've learned Olympus does nothing by chance

https://twitter.com/WartuII/status/1478673813135147010

27/ FYI, @OlympusDAO has emerged as a massive player in the Curve Wars (see below). They’ve an enormous treasury, millions of $$ worth of $CVX and control a ton $veCRV voting governance as a result…

They also work closely @redactedcartel & hold $BTRFLY on their balance sheet

28/ @Recactedcartel is a friendly $OHM fork and was approved by @OlympusDAO community (via OIP vote)

Redacted aims to acquire governance tokens ($CVX, $CRV, $gOHM) in order to increase its influence on the Curce Wars + benefit from bribing/governance. More on them shortly...

29/ Issuing Bonds (remember the $OHM forks):

Check out this @Spirit_Swap Medium article. It seems Phantom DAO (soon to be launched on #Fantom) has an upcoming governance vote.

IF approved, Phantom DAO will be accepting Spirit LPs for bonding (TBD)

spiritswap.medium.com/?p=738bae30d728

30/ Proposal TLDR: Take particular note of points 3 & 4

Intentions are clear for Phantom DAO to use $SPIRIT rewards to lock them into $inSPIRIT. So what do we get?

More $SPIRIT demand, more locking $inSPIRIT & another fold to the war

Something to watch as approval is TBD...

31/ Passing community governance IPs:

DAO to DAO partnerships are being proposed. This would influence the Spirit Wars and create other competition for $inSPIRIT control

A new @redactedcartel governance proposal is out. Interesting innit? Link here:

commonwealth.im/redacted-carte…

32/ Proposal TLDR: Redacted will benefit through accumulation of influence on SpiritSwap gauges and Fantom network.

You can ready the summary below 😁

33/ Wrapping up this section: I may have had things backwards.

It seems the 3 $CVX acquisition strategies are currently being mapped to @Spirit_Swap

We've found evidence of this sprinkled in numerous places...just follow the breadcrumbs.

It'll be be fun to watch

34/ Still, @LiquidDriver has a HUGE head start vs. other protocols in the Spirit Wars

For now, they will be the ones getting the bribes that’s what matters!

TBD if we see a shift in strategy back to acquiring $LQDR for governance control of $inSPIRIT, like it is with $CVX...

35/ Let’s continue on…BIG THINGS happened this Sunday folks!

The first bribes were directed towards $LQDR

Indicating: The Spirit Wars are getting real…and now they've starting to take shape.

https://twitter.com/FTMAlerts/status/1480208134568390660

36/ TLDR: "LIP-004 aims to bring @fraxfinance to the top of the stablecoin scene on $FTM via a partnership. The bribes paid in $FXS will be accumulated in the treasury."

FRAX team would “Bribe” LiquidDriver into voting in favor of their pool [FRAX-FTM]

*$inSPIRIT control*

37/ This is good stuff! It’s a positive sign for @LiquidDriver and importantly, $xLQDR hodlers…

Some things still need to develop:
- The Bribe infrastructure is not yet rolled out and thus the creation of an xDAO fund is needed

ALPHA: @LiquidDriver is achieving their roadmap!

38/ Here is the description of benefits:

- Yield could be redistributed to xLQDR holders
- Frax could acquire xLQDR in the future
- 1st instance of a bribe for inSPIRIT emissions

Plz note: this proposal has verbal agreements, so both sides have to uphold once it's passed

39/ There are still a number of important open items to watch:

- How will bribes be paid to xLQDR holders?
- Does the xLQDR staking model remain the same for bribes?

This is a huge first step in what is sure to be an evolving situation. We're headed in the right direction!

40/ Something else I find interesting…

If you look at this weeks gauge vote on snapshot from @ConvexFinance, you’ll notice a familiar face sitting atop the voting results… @fraxfinance

(*also note $MIM and $UST as well*)

41/ What stands out to me here? History often repeats itself.

Add another fold to the Spirit Wars, it's been developing within the Curve Wars for a while now...

Developing narrative: Decentralized Stable coins vying for cross-chain dominance. The war within the war?

42/ If we look at what's going on with stables on #Fantom we see the rise of $MAI, $MIM and now to the party @fraxfinance

We're all weary of centralization w/ existing stables, for good reason. Other stables are taking center stage and will fight tooth and nail for liquidity.

43/ @LiquidDriver reminded us of the new boosted pool on @Spirit_Swap, $MAI / $FTM

Do you think $MAI wants liquidity directed towards their LP?

For me this all screams bribe potential and makes me bullish on @LiquidDriver & @Spirit_Swap positions!

https://twitter.com/LiquidDriver/status/1477743055054815235

44/ Further, it’s been made clear $MAI is making inroads with @SpookySwap and @tombfinance:

https://twitter.com/QiDaoProtocol/status/1479134940432420864

45/ Also a recent update from @EXODIAFinance bringing $MAI into the fold with @beethoven_x pools…

It seems competition among stables is growing and will be an important element down the road, even for collateralized stables like $MAI

https://twitter.com/EXODIAFinance/status/1479192630244302852

46/ In short, the fight for liquidity could also create sizable bribe opportunities for $xLQDR or $inSPIRIT lockers. Depending on the partnership and players…

We’ve seen this happen with $CVX IRL already (see 40/)

$MIM, $MAI and $FRAX could all seemingly be in play...

47/ Also, @AndreCronjeTech & @danielesesta are ramping ve(3,3). It seems it could potentially bode well for $inSPIRIT, xLQDR, xBOO, fBEET lockers?

But true impact is unclear in this context...We do know whatever they do, its BULLISH for $FTM longterm!

link.medium.com/q7m7uftRHmb

48/ In summary, really positive things are happening in the Spirit Wars:

- Bribes have started
- Competition is ramping up
- $LQDR & $SPIRIT have looked rock solid in down market
- Events are unfolding that will make things very interesting long term

Now we pay attention!

49/ Clearly, I like the long term outlook/potential of both @Spirit_Swap & @LiquidDriver

FYI: If you want to learn more about dApps on #Fanton...

Check out the @FTMAlerts Library - You can learn about each protocol and ways to use their platform

docs.google.com/spreadsheets/d…

50/ Well, here’s where we part!

Enjoy a live look at me after compiling information for 18 hours, 61 tabs open, having fit 45+ tweets to acceptable lengths with 220 revisions…thinking at the end: Does this sh*t even make sense?!? 😂

War on #Fantom! See you soon.