But it's more than just an ordinary governance token.
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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.
8/
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.
10/
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.
12/
$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).
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.
17/
Recommended reading to learn more about the $CRV wars 👇
@0xPolygon addresses some of the challenges that face the @ethereum network. There's been a lot of buzz around $MATIC lately, but the chain was down for 8 hours last week.
Read more about the sidechain (or Layer 2??) in our latest article: bit.ly/37DCo0L
1/ Polygon has various scaling solutions, and users are at liberty of selecting the scaling solution that suits them best. Some of these solutions are already working, while others are still developing.
2/ Polygon performs most of the tasks you enjoy from Ethereum but avoids the low throughput and high transaction fees. Polygon started as a simple scaling solution, but it has now evolved to a broad ecosystem with various use cases.
⁍The creator of crypto’s first non-liquidatable self-repaying loans improves upon the original structure to bring a more stable and user friendly V2.
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2/2 ⁍Previously @AlchemixFi loans were only collateralized with one token using one @iearnfinance strategy to generate yield. It will now be possible to use any number of collateral tokens and many different #yield strategies to build a customized self-repaying strategy.
⁍@CelestiaOrg Welcomes @Yazanator as Head of Developer Relations, and he makes a great first impression in this thread by eloquently explaining what makes Celestia special.
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2/2 ⁍@StargateFinance is the first multi-chain bridge to solve the “bridging Trilemma”. users can participate in their “liquidity generation event” at launch. Layer Zero has also announced that @0xMaki will be leading their business development. We're Bullish.
⁍@Wonderland_fi has proposed a new “Rage-Quit” option for those interested in exiting the project. You can get a better deal than the current value for any $wMEMO you’re holding.
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@Momentum_6 portfolio company @VirtueDAO is a #DAO that focuses on the players. Their mission is to help realize gamers’ peak performance through a combination of specialists, operators, and analytical insights.
1/ The DAO is a self-service, automated system that allows players to onboard and join the P2E economy, irrespective of their location. The DAO currently focuses on @AxieInfinity, @GuildOfGuardian, @illuviumio, and @TheSandboxGame and is in talks with other games.
2/ The analytical insights and algo guild mgmt system make It stand out. With this visual-based system, gamers can build their guilds within the platform, see what P2E assets are available, calculated APYs of NFTs, historic earning rates, and the day-to-day system’s granularity.
⁍ @metaverseOrg Introduces Yuki, the first decentralized Virtual Celebrity powered by AI, NFT & Web3. They're redefining celebrity interaction, and expect it to be a $1T biz
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2/2 ⁍ Some big names are backing the development, including @nvidia , @animocabrands , @NEARProtocol , @LongHashVC , @0xPolygon , and several others. The thought that the entire “celebrity industry” could become decentralized and community driven has caught our interest.
⁍P2E games are an exciting new approach to gaming, but the details on developing a sustainable model are still being worked out. @NicoVereecke shares his thoughts on what changes could be made to #P2E economics.
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