From bribes to audits, good fortune is flowing in only one direction.
Votium Round 15
Among the things cryptocurrency is disrupting is boring weekends. While TradFi tries to pretend money is illiquid on days starting in “S,” degens know that weekends are for watching cash pile up in the form of escalating bribes.
This one, round 15, was one for the history books, shattering most prior Votium records.
Bribes this round averaged $.56 / vlCVX, a record high total of $21MM.
As usual, the round was led by flywheel kingpin FRAX, who are approaching 8 figures.
In addition to the bonanza, we witnessed the first ever cross-chain bribe.
While the potential for v2 pool bribes is indeed exciting, it’s exciting more for the point of view of seeing more value flowing to sidechains, than for sidechains impacting bribes. Over 90% of the value remains on ETH, so we’re still some distance from sidechains become major players.
If you want to follow the action every Sunday, the best place is the aforementioned @wagmiAlexander, who keeps track of incoming bribes and forecasts flows in realtime.
For a bit more background, KingMaker Podcast held a must-listen Twitter Space conversation with @WAGMIAlexander.
One great point by Alex on the above podcast was that many users who bought $CVX at the top felt disappointed by the trough of disillusionment from seemingly dropping yields during the bear market.
Yet true degens don’t denominate in Rug US Token, but in pure unadulterated ETH. The point was tough to illustrate in the podcast’s audio format, but repricing Votium bribe volume from $ to ETH and you see very little dip in real terms.
The interview with @WAGMIAlexander ended up the second entertaining DeFi public event in as many days. Yesterday, Curve founder Michael Egorov appeared on the BIS DeFi 22 panel. His appearance starts at 1’45”, where he capably rebuts the ever-evolving bank FUD.
BankBot: “Regulation is urgently needed to safeguard consumers and investors…”
Egorov: “I mostly disagree the solution is regulation, apart from maybe scams in DeFi. I think if there was regulation to ban Google Ads, that would solve most of the scams.”
For past assaults by BIS bankbots:
Convex Audit
Boomers may recall one month prior when Convex responsibly disclosed a bug and required migration to a new vote-locking contract. We finally have the full story, and it’s a doozy.
The short version is that a full audit by OpenZeppelin uncovered a potential bug in which Convex could have theoretically misappropriated $15 billion worth of funds.
You have to imagine that $15 billion is life-changing money for anybody. Even the greatest of saints would surely be tempted by such an evil exit opportunity. Yet in the end the devs would instead quickly patch the vulnerability and force a migration to a safer contract.
We have to conclude that whomever the anonymous Convex devs are either extremely upstanding, or they perceive the long-term value of Convex to be even greater than the $15 billion they could have swiped. Either is great news for Convex stakers.
Still, there was no way for OpenZeppelin to predict the anonymous Convex devs were in fact upstanding. This left OpenZeppelin in a tight spot — what if the bug was in fact an intentional rug that had been inserted intentionally? What if Convex devs were Sifu in hiding? In such a situation, OpenZeppelin disclosing the bug could have caused malicious devs to panic and trigger this intentionally!
OpenZeppelin chose to refer obliquely to the bug and requested the Convex team doxx themselves for more details. Instead the team hunted out the bug and patched it. Impressive work from all parties.
So while some questions were answered, it also raises further (boolish) questions. This audit was being conducted on behalf of Coinbase. But why did Coinbase want to pony up their cash to pay for a deep audit of Convex?
Speculation intensifies… some of the below have threads and replies worth viewing…
When speculating, keep in mind the public spat between Coinbase and Genslooooor last September. The latter has made it a top priority to protect ordinary Americans from escaping poverty, and hence he viciously attacked Coinbase when he heard they may offer yields greater than a few basis points.
Such regulatory insanity will surely influence whatever plans inspired Coinbase to pay for such an audit.
BTW, if for some reason you disagree with the agency’s priorities, you can make a difference by dropping a note in the ongoing LeXPunK Army/PAC DAO letter writing campaign. And score a free NFT for your trouble!
Value
Convex aficionados who bought at a low price are excited about using these bi-weekly bribes to pay off their investment back in short timeframe.
If Convex intrigues you, remember that navigating Votium bribes can be tougher for a smaller bags. Votium can optimize your yields, but you may end up with mere pennies worth of some tokens that cannot be claimed efficiently due to high gas prices. Shrimp are advised to look at services that can automate this process and make it more efficient.
The value of Convex is somewhat dependent on the question of if bribes will continue apace. Fortunately, for protocols considering joining, Votium remains highly efficient, suggesting room to run. You can track bribe efficiency on the Llama Airforce
This can get complicated in that there’s multiple options for bribers. Protocols can bribe through Votium, purchase CVX directly, or if prices become imbalanced, go directly through veCRV. The flywheel is a self-balancing apparatus.
As always, this is meant to be educational, not financial advice. Risk is always present. You might do good to interpret any outsized yield as a reflection of risk.