April 18, 2024: [Net Worth] Halving 📉💸
Bitcoin-backed Stablecoins from f(x) Protocol, Lambda + Threshold, and their place in The Narrative™️
The halving came early…
In their way, falling prices can be healing. Following a lengthy era of absurdly high $crvUSD borrow rates amidst demand to leverage long BTC, the market dump appears to have restored rates to earth and healed the peg…
For the first time since it got added to the UI, the Peg Keepers printed!
We’re waiting for all the tireless nags who want to tell Mich how to manage his money to start offering advice to Peg Keepers. Would be a fun series of 𝕏eets to see debt shaming FUD like those presumptuous enough to scold Mich, but directed toward smart contracts and their borrowing practices…
Once you get your $crvUSD though, what should you do with it???
The stability of $crvUSD and its broader adoption across DeFi have been a delight to behold the past year. Using depegs as a cudgel to beat fees out of borrowers until it repegs remains an elegant and highly profitable system for Curve.
Something Curve is doing is working in terms of fundamentals (worthless, worthless)… if not in terms of the more coveted pump-amentals
Constructive critiques towards Curve continue to flow freely and get considered. If you have thoughts for how to keep the veteran protocol dynamic, you have a direct line to the founder in the socials…
What if the next ultra-transient narrative in crypto will be a heads-down focusing on driving real revenues delivered in cold hard cash (or $crvUSD equivalent)?
Bitcoin DeFI
The funny thing about hot narratives in crypto is that they’re tough to chase for builders. If you’re going to sling code to support the crypto Current Thing, then by the time you wait a month or two for your audit the narrative will have already passed.
The narrative since the ETFs had been “Bitcoin,” but might this narrative run out of steam before the halving?
Maybe Bitcoin shorting is the new narrative?
Having followed BTC for a decade, we’re generally disinclined to pay much heed to Bitcoin death narratives (though we grant that ETFs as final boss may change the game.
Along with the BTC halving, we’re excited to see the advent of Bitcoin… but tokenized on Ethereum… but dollarized!
f(x) Protocol has seen a lot of success cleaving Ethereum in twain. Why shouldn’t it swing its axe through Bitcoin in the same manner?
Using the same battle-hardened mechanics, the team are adding $btcUSD (the stablecoin) and $xWBTC (the leveraged partner) as early as tomorrow.
What if they have something special planned for the launch?
The protocol may face symbolic competition on trading charts namespace. Yesterday Lambda Finance also introduced their own $btcUSD. (Perhaps $λUSD works?)
In this case, the collision in symbols appears to be the major overlap, as the functionality of both are quite different. Lambda Finance functions as the first authorized $crvUSD fork, along with its “soft liquidation” mechanic and veTokenomics.
This contrasts with f(x) Protocol, which is friendlier in excising the liquidation concept, at the expense of lower leverage rates.
Imajin if the next narrative is friendlier liquidation mechanics in borrowing protocols…?
Some additional info on Lambda:
Finally, Threshold Network has a bit of a home field advantage in the Bitcoin-backed stablecoin race. You can’t dollarize a tokenized Bitcoin unless you tokenize it first.
The first generation of tokenized Bitcoin has turned into a ghost town. Previously renBTC was deprecated, and now year Synthetix sBTC is being sunset. Only WBTC remains from the first class.
However, Threshold Network’s $tBTC represents the newer generation of bridges, and its market cap has been pretty much up only the past year.
Earlier this month, Threshold announced their stablecoin in $thUSD.
$thUSD unique features include zero interest loans, instead charging a one-time loan origination fee of 0.5% with a minimum 110% collateral ratio. The stablecoin is backed by “Bitcoin and Ether,” and will maintain all its collateral natively on the respective blockchains.
One long-time promise of Bitcoin is that it would prove a superior currency the dollar. With the rise of these three new stablecoins, Bitcoin is showing off its transmutability and programmability… Bitcoin can directly mimic a dollar.
Disclaimers! Author is long $FXN, Lambda, and $tBTC!