3/ @ConvexFinance was the first flywheel, allowing protocols to bribe for higher emission of $CRV on specific pools in @CurveFinance
This allowed @FraxFinance to acquire $vlCVX and direct higher $CRV emissions on $FRAX pools compared to other pools ($FRAX > $3POOL)
4/ Therefore, protocols desiring liquidity in Curve essentially needs to accumulate $vlCVX to direct $CRV rewards into wanted pools (also called the #CurveWar)
TLDR: Acquire more $veCRV ($vlCVX) to vote on $CRV emission
5/ $vlCVX also receives bribes from different protocols for $vlCVX holders to vote on their pool emissions
This creates a fluctuation of $CRV emissions on each pool every 2 weeks
6/ Pools that receive votes generate ↑ APR to ATTRACT liquidity
However, $vlCNC actually DIRECTS liquidity into the “MOST EFFICIENT POOL” with "highest" yield
$vlCVX = direct $CRV inflation gauges = ↑ APR
$vlCNC = direct liquidity shift → pools with ↑ APR
7/ However, at the same time, because the deployment of liquidity deposited on @ConicFinance is not based on a smart contract to always deploy in the "HIGHEST" or the most efficient pool,
There may be a war to accumulate $CNC to direct #Omnipool liquidities to specific pools
8/ Essentially, this means #Omnipools may be distributed on pools with ↓ and even unattractive Curve pools if the $vlCNC holders choose to do so 😲
Protocols can easily fight to lock more $vlCNC to govern the #Omnipools liquidity
9/ I personally see high demand and benefits for $CNC relative to LPs in the short run (until $CNC MC becomes > than the TVL of the pools)
✅ This is also enhanced by the "GUARANTEE" factor TVL assets are directed by $vlCNC holders as @ConvexFinance only “ATTRACTS” liquidity
10/ This translates to a simple formula =
1 $vlCNC / #Omnipool TVL
#Omnipools are efficient yield collecting pools so it will naturally grows in TVL with high APR (as $CNC is distributed on top of $CRV & $CVX)
$CNC MC < Omnipool = 🙆♂️ Cheap
$CNC MC > Omnipool = 🙅♂️ Cheap
11/ Then why would LPs want to deposit if liquidity is dictated by $vlCNC holders?
1. Efficient way of earning high yield based on emission shifts 2. Rewards are in $CRV + $CVX + $CNC (> than depositing on Convex) 3. LP Boost Factor: mechanism to prevent abuse of #Omnipool
11/ $vlCNC is boosted by two factors:
What this does is it allows LPs to have a bigger say on how the TVL will be distributed across pools in Curve
✅ A setup to prevent protocols with no LP exposure to abuse the protocol’s model through immediate $CNC buy up (when cheap)
12/ $CNC accumulators and LPs (with higher voting boost) will compete to shift liquidity of @ConicFinance
• This is good for $CNC as there is ↑ demand
• LPs are earning $CNC on top of providing liquidity - therefore, they also do have interest of having healthy $CNC demand
13/ So we will see more protocols competing in the #CNCwar to buy and direct liquidity at cheaper price (when MC < TVL)
As obvious as it seems, it is a matter of time until @ConicFinance acquires higher TVL than $20 M
14/ So what are left until we kick off?
1. $CNC Airdrop worth about $1,000 claim for $CVX holders is due until October 4 = less $CNC sell pressure for airdrop claimers (67.5% left)