The Curve Wars.
If you're interested in learning about how the battlefield has dramatically changed, read this:
If you're interested in learning about how the battlefield has dramatically changed, read this:
Here's what I'm going to cover:
• The Curve Wars
• Alliances and the 4pool
• The Future of Stablecoins
• And I'm going to share tons of examples.
Let's dive in!
• The Curve Wars
• Alliances and the 4pool
• The Future of Stablecoins
• And I'm going to share tons of examples.
Let's dive in!
To fully understand the impact of the new 4pool comprising of $UST, $FRAX, $USDC, and $USDT.
We should revisit the fundamentals of both $CRV and $CVX.
Let me break things down simply, for you...
We should revisit the fundamentals of both $CRV and $CVX.
Let me break things down simply, for you...
Curve
Curve is as an automated market maker which specializes in stablecoins swap with low price slippage.
Liquidity providers deposit stablecoins into a pool to earn trading fees.
The fees come from people swapping assets using this mechanism below:
curve.fi/files/stablesw…
Curve is as an automated market maker which specializes in stablecoins swap with low price slippage.
Liquidity providers deposit stablecoins into a pool to earn trading fees.
The fees come from people swapping assets using this mechanism below:
curve.fi/files/stablesw…
Attracting liquidity
Pools require liquidity so that Stableswap (swap mechanism) can operate optimally.
Incentives for LP's are given via the liquidity mining programme.
Basically, more CRV for depositing $CRV.
Which can be locked to receive $veCRV.
Pools require liquidity so that Stableswap (swap mechanism) can operate optimally.
Incentives for LP's are given via the liquidity mining programme.
Basically, more CRV for depositing $CRV.
Which can be locked to receive $veCRV.
Governance
Within Curve there is a governance vote on which Liquidity Pools (LP) receive the daily $CRV emissions.
veCRV allows governance over the pools which make up the protocol.
More $veCRV voted in an LP bring proportionally higher rewards in the form of emissions.
Within Curve there is a governance vote on which Liquidity Pools (LP) receive the daily $CRV emissions.
veCRV allows governance over the pools which make up the protocol.
More $veCRV voted in an LP bring proportionally higher rewards in the form of emissions.
veCRV
This can be locked for a period of for 1 to 4 years at 0.25 to 1 conversion rate.
Vote-locking CRV for 1 year gives you 0.25 veCRV and so on.
Removing CRV induces supply shocks.
Most importantly, it aligns the incentives of the token holders with that of the ecosystem.
This can be locked for a period of for 1 to 4 years at 0.25 to 1 conversion rate.
Vote-locking CRV for 1 year gives you 0.25 veCRV and so on.
Removing CRV induces supply shocks.
Most importantly, it aligns the incentives of the token holders with that of the ecosystem.
Convex
If you've heard of Curve, you've most likely stumbled across Convex ($CVX)
Convex bridges the lucrative gaps between LPs and veCRV holders.
Here is an article explaining how:
0xplok.substack.com/p/on-a-shoogly…
If you've heard of Curve, you've most likely stumbled across Convex ($CVX)
Convex bridges the lucrative gaps between LPs and veCRV holders.
Here is an article explaining how:
0xplok.substack.com/p/on-a-shoogly…
vlCVX
vlCVX attempts to capture the power of governance of $CRV emissions.
Approximately 43% of $veCRV is held by Convex as $vlCVX.
Simply put, Convex has monopolised and won "The Curve Wars".
vlCVX attempts to capture the power of governance of $CRV emissions.
Approximately 43% of $veCRV is held by Convex as $vlCVX.
Simply put, Convex has monopolised and won "The Curve Wars".
The Convex Wars
Now that "The Curve Wars" have drawn a winner.
Individuals, protocols and organisations have been competing for governance within $CVX.
Whoever controls Convex has control over Curve.
Now that "The Curve Wars" have drawn a winner.
Individuals, protocols and organisations have been competing for governance within $CVX.
Whoever controls Convex has control over Curve.
I'll get into the real alpha in a sec, but first:
1. Give me a follow for more threads like this: @Crypto8FI
2. Soon to be filled with SERIOUS ALPHA, join below now:
cryptofi.substack.com
1. Give me a follow for more threads like this: @Crypto8FI
2. Soon to be filled with SERIOUS ALPHA, join below now:
cryptofi.substack.com
3pool
Currently consisting of $DAI, $USDC and $USDT.
Arguably, it is the central liquidity pool on Curve with over $3.37B in currency reserves.
However there is little incentive to provide liquidity to this pool.
Currently consisting of $DAI, $USDC and $USDT.
Arguably, it is the central liquidity pool on Curve with over $3.37B in currency reserves.
However there is little incentive to provide liquidity to this pool.
4pool
$UST and $FRAX currently compete via Votium incentives and vlCVX votes, all whilst providing liquidity for the 3pool.
They have now chosen to stop providing liquidity to the 3pool.
An alliance has been formed between $UST, $FRAX, $USDC and $USDT.
agora.terra.money/t/ust-goes-int…
$UST and $FRAX currently compete via Votium incentives and vlCVX votes, all whilst providing liquidity for the 3pool.
They have now chosen to stop providing liquidity to the 3pool.
An alliance has been formed between $UST, $FRAX, $USDC and $USDT.
agora.terra.money/t/ust-goes-int…
"By my hand, $DAI will die"
This tweet has certainly now been brought into the moonlight.
The 3pool holds 1.5 billion $DAI.
As incentives move from the 3pool, capital will follow as yield farmers seek higher returns with greater liquidity.
This tweet has certainly now been brought into the moonlight.
The 3pool holds 1.5 billion $DAI.
As incentives move from the 3pool, capital will follow as yield farmers seek higher returns with greater liquidity.
https://twitter.com/stablekwon/status/1506494471873081352?s=20&t=fcsbblB7OpKqda0OOMx6Fg
The Alliance
Frax and Terra are the two largest protocol holders of CVX (>3.65m CVX).
They are also provide the two biggest Votium incentives (7m in FXS and 4m in UST).
Together, they can make 4pool the most liquid and utilized stablepool across chains.
Amazing huh.
Frax and Terra are the two largest protocol holders of CVX (>3.65m CVX).
They are also provide the two biggest Votium incentives (7m in FXS and 4m in UST).
Together, they can make 4pool the most liquid and utilized stablepool across chains.
Amazing huh.
Yield Outflows
As many of us are aware, Anchor Protocol's payout rate will now vary depending on its' yield reserves.
Inevitably, investors look for a yield elsewhere.
The 4pool is one such option, for $UST holdersss.
I wrote about Anchor rates here:
As many of us are aware, Anchor Protocol's payout rate will now vary depending on its' yield reserves.
Inevitably, investors look for a yield elsewhere.
The 4pool is one such option, for $UST holdersss.
I wrote about Anchor rates here:
https://twitter.com/Crypto8Fi/status/1507297668451618818?s=20&t=fcsbblB7OpKqda0OOMx6Fg
Ethos
“Stablecoin pegs are stronger together than competing against each other."
There will be a significant increase in $UST and $FRAX liquidity due to incentives being used together rather than against each other.
$UST becomes a collateral asset for $FRAX given its' AMO.
“Stablecoin pegs are stronger together than competing against each other."
There will be a significant increase in $UST and $FRAX liquidity due to incentives being used together rather than against each other.
$UST becomes a collateral asset for $FRAX given its' AMO.
Outlook
Both $UST and $FRAX have increased defensibility during periods of demand contraction.
Due to high liquidity, they will have increased peg stability and decreased risk.
Perhaps, further incentivising investors to delve into the 4pool.
A positive flywheel effect.
Both $UST and $FRAX have increased defensibility during periods of demand contraction.
Due to high liquidity, they will have increased peg stability and decreased risk.
Perhaps, further incentivising investors to delve into the 4pool.
A positive flywheel effect.
Redacted
The Terra Community pool will partner with Redacted for their vlCVX power.
Redacted is the 3rd largest DAO holder of $CVX.
Redacted will vote for the UST-3CRV pool with their CVX.
They will move to vote for the 4pool, when it is on mainnet.
The Terra Community pool will partner with Redacted for their vlCVX power.
Redacted is the 3rd largest DAO holder of $CVX.
Redacted will vote for the UST-3CRV pool with their CVX.
They will move to vote for the 4pool, when it is on mainnet.
Mainnet
Initially, 4pool will be tested on:
•Fantom 43 ftm.curve.fi/factory/84
•Arbitrum 21 arbitrum.curve.fi/factory/26
•And mainnet Ethereum
Hopefully, it won't be long before we see the 4pool being deployed.
Initially, 4pool will be tested on:
•Fantom 43 ftm.curve.fi/factory/84
•Arbitrum 21 arbitrum.curve.fi/factory/26
•And mainnet Ethereum
Hopefully, it won't be long before we see the 4pool being deployed.
Market Share
Currently they will own a 41.1% share of DAO owned CVX.
Although it hasn’t been officially voted on by @OlympusDAO participants, @Ohmzeus has also shown interest in supporting the 4pool.
Further increasing the collective share to 47.8%.
I see deep liquidity ser.
Currently they will own a 41.1% share of DAO owned CVX.
Although it hasn’t been officially voted on by @OlympusDAO participants, @Ohmzeus has also shown interest in supporting the 4pool.
Further increasing the collective share to 47.8%.
I see deep liquidity ser.
That's it for today!
Bookmark this if you want to re-visit it again.
If you want more awesome content, subscribe to my emails over at
cryptofi.substack.com
Bookmark this if you want to re-visit it again.
If you want more awesome content, subscribe to my emails over at
cryptofi.substack.com
Oh, and one more thing.
It'd mean a lot to me if you could like/retweet the 1st tweet linked below.
Help your frens get into the 4pool early!
It'd mean a lot to me if you could like/retweet the 1st tweet linked below.
Help your frens get into the 4pool early!
https://twitter.com/Crypto8Fi/status/1510295696036880397?s=20&t=fcsbblB7OpKqda0OOMx6Fg
• • •
Missing some Tweet in this thread? You can try to
force a refresh
