April 30, 2024: From ACFI to ZETA 🔤⛓️
Accumulated Finance and ZetaChain partner to incentivizing liquidity on Curve
As yet another down round, it passed with relatively little fanfare, but all the same, congrats to Convex on completing the memetically significant round 69!
All time, Convex has distributed $300MM in revenues, quite a milestone!
We continue to enjoy Real Yield even if it’s not exactly appreciated by the market. For one flippening we didn’t expect, cumulative lifetime veCRV income just flippened the entire $CRV market cap…
At any rate, one new participant both on the most recent Votium round, as well as Stake DAO’s Votemarket, is $ZETA incentives distributed via Accumulated Finance.
We’ve not really covered either much in our newsletter, so here’s what we’ve learned…
Accumulated Finance
Accumulated Finance first hit our radar last year, when some notable angel investors caught our eye…
In our humble opinion, Curve and Stake DAO angels tend to have a pretty good filter for quality projects. Had they not suffered unfortunate hacks, one can imagine the robust state of the ecosystem with thriving innovative projects like Conic, Prisma, Zunami…
Suffice to say, Accumulated Finance has been on our radar for some time. They describe themselves as an “Omnichain modular LST/LRT protocol integrated with Curve ecosystem.”
In other words, they are providing a means of tokenizing various staked assets to make them freely tradable. They’ve initially launched with a handful of LSTs for $MANTA, $ZETA, and $WACME, with several more in the pipeline.
After wrapping, the assets can be farmed in a variety of pools, mostly on Curve, and hence the team’s interest in getting into the incentives game.
This feeds into their broader tokenomics for the $ACFI governance token, through which liquid stakers receive the ability to purchase the governance token at a discount rate in what they dub the Discount Staking Options (DSO) program.
This DSO program is the primary pillar of their tokenomics. Of the 3 billion total $ACFI tokens, fully two thirds are earmarked for these protocol rewards. From their tokenomics page:
Since going live about three months ago, the protocol has gathered some initial TVL from a handful of the first supported chains.
One thing we appreciate about Accumulated Finance is that it does not appear to be one of the fly-by-night get-rich-quick type projects we see so often in crypto. They’ve been steadily building since a year ago, the depths of the bera.
The ambitions ramp up throughout 2024 and by 2025 they are targeting $1 billion TVL. A hefty goal, but given their plans to ramp up to a couple of dozen protocols this year it’s not out of the question…
From a technical perspective, the most novel part of Accumulated Finance is their use of the xERC20 standard (aka ERC-7281)
Given the issues we’ve seen with bridging, xERC20 is a valiant attempt at limiting risks. Essentially, it shifts the ownership of bridged tokens away from the bridge operators and towards the token issuers. The issuers can set adjustable rate limits on varying bridges, based on their judgement of the bridge’s security. Bridges call on a standard and immutable lockbox contract (akin to the WETH contract) to wrap tokens 1:1 into their equivalent xERC20. Accumulated Finance adopting the standard is a good indicator…
The other notable feature of Accumulated Finance is their formal integration with ZetaChain, which is itself novel. Accumulated Finance announced their staked ZETA partnership in February, but few know much about the chain or its ambitions.
ZetaChain
ZetaChain, built on Cosmos, is a blockchain that describes itself as “omnichain, generic smart contracts and messaging between any blockchain.” Their 𝕏 bio touts: “Build interoperable dApps. Span chains from Ethereum to Bitcoin and beyond. Access all of crypto from one chain.”
It’s another project that’s been building for a long time, around for three year by their estimation, and only lately do we in the general public get to see the fruits of their perseverance. In August of last year they announced their raise of $27MM. By January their mainnet launched in beta.
The ZetaChain whitepaper was released over a year ago, and describes their system for architecting a proof-of-stake blockchain with omnichain smart contract support. The guts of their system involve the role of “observers”:
The observers scan external chains for relevant events, transactions, and states at a point in time, and reach consensus on observation on ZetaChains blockchain. The signers collectively possess a single Threshold Signature Scheme (TSS) key that is able to send authenticated messages to external chains and hold assets like normal accounts/addresses on external chains.
The entire blockchain revolves around this native ZETA token, which is used for gas to execute at the smart contract layer, as a cross-chain intermediary asset for cross-chain messaging, as well as staking and governance. The token launched with a 2.1 billion total supply, and a target of 2.5% annual inflation. More details on their tokenomics in their documentation.
Since their launch this year, they’ve seemingly done some numbers. Their website boasts:
And on their blog they touted they had reached the top 5 blockchains by weekly active users. In crypto, we can never be sure if the stats are juked, or if it’s a bona fide phenomenon in a different part of the world that we can’t see given how US users are “protected” from what’s going on elsewhere. As always, do your own research!
We tend to believe there’s something of substance, given that their block explorer shows real activity and that investors are putting the token at a 9 figure market cap that’s been relatively stable (in crypto terms) since launch:
The other metric we use to judge the veracity of anything in this space is how the big brains at Curve view it, and from what we’ve seen it appears as if Curve is sincere about launching on ZetaChain:
And that Curve, no fan of marketing, was willing to put its name behind an event in Hong Kong:
It all ties back to Accumulated Finance — we confirmed with the Accumulated Finance team that they partnered officially with Zeta to help deploy the ZETA/crvUSD pool, and ZETA is supplying the tokens to incentivize the pool — with Accumulated providing omnichain liquid staking.
As usual, we are just scratching the surface. Far more information, particularly deeper technical dives, are available in the ZetaChain documentation.
The explosion of L2s introduces the problem of fragmented liquidity, so we’re always interested to see solutions that tackle omnichain solutions. Earlier this month we also profiled EYWA’s CrossCurve.
As always, we welcome reader feedback on all these emerging protocols. Share your experiences in the comments!
Disclaimers! Author has no stake in Accumulated, EYWA, or Zeta