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Mar 16 21 tweets 8 min read
A summary of the $CRV wars going on in #DeFi (@CurveFinance)🏹

🧵👇

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If you don't know about the Curve Wars going on in #DeFi, we recommend reading about them.

It's a big deal and can be very lucrative if you find the right way to play it: bit.ly/34Qtj3C

We've also linked more recommended reading resources at the end of this thread.
3/

It sucks to lose $ when swapping one stablecoin for another.

Typically, this happens because of slippage (due to low liquidity).
4/

@CurveFinance is a DEX that specializes in low-slippage, low-fee stableswaps.

$CRV is the governance token for @CurveFinance.

But it's more than just an ordinary governance token.
5/

The $CRV token is so important that it has spawned several other projects whose sole purpose is to accumulate $CRV through creative methods.

This battle for $CRV is what people in the space call the Curve Wars.

Here's why $CRV is so important... 👇
6/

When you lock up $CRV for a period of time, you receive $veCRV (vote-escrowed $CRV)

This means you are rewarded with a % of the fees from all trades on @CurveFinance proportional to your $CRV holdings and lockup period.
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$veCRV holders can vote on which LP the next round of $CRV emissions will be directed towards.

So as a $veCRV holder, you can vote for emissions to be directed to the LPs you are participating in.
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Every stablecoin strives for more liquidity.

Deeper liquidity pools means lower slippage, better pegging, more stability and more adoption.
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Projects can also "bribe" $veCRV holders to vote for emissions to be sent to their LPs using their own tokens.

If $veCRV holders vote to direct emissions to a pool containing a project offering a bribe, they receive that project's tokens on top of the $CRV fees.
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Enter @ConvexFinance. Convex decided to start accumulating $CRV tokens so that they could direct emissions.

In order to accumulate $CRV, Convex came up with the following model...
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Users can deposit to LPs directly on @ConvexFinance, and earn boosted $CRV rewards + $CVX tokens.

On the backend, Convex is still using @CurveFinance.

Users can also stake $CRV directly on Convex, and receive $cvxCRV instead of $veCRV.
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$cvxCRV is liquid (unlike $veCRV).

This means it can be redeemed for $CRV at any time.

@shivsakhuja mentioned before that he doesn't love locking up tokens (though $CRV might be an exception to that).

Still, why lock? There is a liquid alternative.
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As a large holder of $CRV governance tokens, @ConvexFinance gets to push its weight around to decide where to direct emissions.

But of course, it doesn't end there.

The fight for $CRV has spawned many other protocols that exist to stack governance tokens.
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These include:

• $BTRFLY aka @redactedcartel (█████)
• $GaaS or @CongruentFi
• $BENT or @BENT_Finance
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If you need more evidence for the value of the $CRV and $CVX, take a look at some of the DAO heavyweights that own $CVX.

Source: daocvx.com (ty to @DeFiDividends)
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Liquidity is a very valuable commodity in #DeFi, and there are lots of smaller scale battles going on for Liquidity in other corners of the DeFi space.

Keep an 👁 out for more governance projects / veToken models / liquidity wars.. this is likely going to be a big theme.
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Recommended reading to learn more about the $CRV wars 👇

1.
bit.ly/34Qtj3C
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How are you playing the Curve Wars?

Contributor ✍🏾: @shivsakhuja

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