August 15, 2024: A Bit of Drama 🪙🎭
BitDrome, a fork of Curve-NG pools and ve(3,3) tokenomics, launches on BEVM
If you only read one thing today, stop reading this newsletter and instead read this outstanding article on Curve Monitor by Benny, showing off sophisticated web3 analytics (without trackers!) from the unparalleled Dr. Benny:
If you choose to read two things today, then by all means, keep reading…
It Was All Orange
Silly us… we keep putting all our focus onto things like $ETH… and $CRV…
Yet all along we were being played.
Instead of looking to the most innovative tokens, we should have kept our focus on the king… it was always about Bitcoin!
Badger DAO, pioneers in Bitcoin DeFi on Ethereum (and eBTC), penned some extended thoughts on the state of Bitcoin DeFi.
As Bitcoin DeFi comes of age, we were overwhelmed trying to review the sheer number of BTC wrappers hitting the market just this past week…
August 14, 2024: Bitcoin Restaking? 💸😵💫
Bitcoin is the number one cryptocurrency in the world, and this week it’s starting to act like it… in terms of attracting a ton of products being built atop it.
Funny enough, yesterday’s article was originally intended to be about Bitdrome, but so many BTC wrappers got announced that Bitdrome got bumped! Let’s rectify this…
Bits Alive!
When Bitdrome first burst onto our timeline, we thought it might be premature to write about the project. Then we were surprised to observe it had already attracted $2MM TVL.
Maybe it’s protocol owned liquidity, but it’s already boasted $14K in fees…
So we visited the site to confirm Bitdrome’s UI is indeed live, if a bit buggy…
So, what is Bitdrome?
About Bitdrome and BEVM
Bitdrome is a “licensed” Curve fork for the BTC ecosystem
They’re using the Curve-NG pools to bring a DEX to BEVM, an EVM-compatible Bitcoin L2 that uses BTC as a gas token.
We are not super familiar with BEVM either, and it also appears to be in its infancy.
Most of the chain’s TVL is in fact Bitdrome, so it certainly seems like it’s just taking off.
As for Bitdrome’s tokenomics, they’re relying on the ve(3, 3) system initially developed by Andre Cronje and popularized by Velodrome/Aerodrome.
At least, this is what we’ve gleaned from what the team has posted in public.
Beyond this, details are scarce. Their docs are quite meager at this stage, and at times cribbed verbatim from the protocols they’ve forked.
The contract for their only pool is also an exact copy of the Curve TwoCryptoOptimized, confirmed by a diff.
In this case, it may be a good thing to copy battle-tested and well-audited code (provided there’s no idiosyncrasies about the BEVM chain that would cause this code to function differently, which a cursory glance suggests is the case.)
Copying code without permission might lead to friction, but it appears the use of the Curve-NG pool smart contract code has been authorized by Curve.
What’s the Relationship with Curve?
The protocol was shouted out on Curve’s 𝕏 account as a “mutually beneficial fork.” Curve fren Haowi implies it could bring “more revenue” to veCRV holders.
We’re not privy to any arrangements, but forced to guess we’d imagine they pledged some percentage of the fees to veCRV holders.
If it was hard-coded, perhaps it might be enshrined in the token’s logic? We searched the BEVM block explorer for deployments by the same address as the deployer of the pool. We identified the fee collector address had indeed pocketed $14K, but as an EOA address it has no no capacity to automatically bridge funds to veCRV holders, so we presume it will be performed manually for starters.
So onchain sleuthing reveals it’s a project in a very early stage rushing to launch as quickly as possible. Otherwise, we know no more than what’s been reported in public.
Others in the Curve community appear to be similarly uninformed.
However Mich (who operates the Curve social media account) appears to be friendly with Bitdrome founder Kenichi Sato. Meanwhile, Sato is active in the Curve chat and acts quite friendly to the Curve community. We’d therefore characterize relations between Curve and Bitdrome as friendly.
But this was not the case with every protocol Bitdrome is aping…
*Drome Warfare
Bitdrome styles itself as part Curve NG, part ve(3, 3). Based on the name “Bitdrome,” we initially assumed the project was the newest wing of the rapidly expanding *Drome empire. In fact, the relationship between the projects appears outrightly hostile.
You may have observed last month’s tete-a-tete on 𝕏. We’ll reprint it in nearly its entirety for you to judge, mostly because good fireworks juice our newsletter stats.
Trigger warning: drama to follow…
This is either authentic grass-fed, grass-finished beef, or the world’s most brilliantly staged PR tactic. Our bet is on the former, and we’re always saddened when DeFi protocols fight.
Yeah Yeah, Just Tell Me, Should I Yeet My Entire Net Worth into Bitdrome?
We’ll disclose up that we’re not users of Bitdrome (we are long VELO / AERO), nor are we likely to be users of Bitdrome anytime soon. This is nothing against Bitdrome, nor anything specifically related to the drama.
As a matter of course we seldom use L2s anyway. We also tend to be deliberately late adopters to most DeFi, to give protocols lots of opportunity to get hacked before we risk our funds. Neither BitDrome nor BEVM have released any audits, and in the case of BitDrome their tokenomics are not yet finalized. Just way too early stage for us at the moment.
So we would have already been firmly planted in the spectator camp, even absent any drama.
Factoring in the feud, we’d add a note of caution: we consider it bearish that Bitdrome is starting out with such a hostile stance against a protocol they’re forking (or rewriting or whatever.)
As consummate sinners, we’re unqualified to credibly comment on any of the ethical points raised in the debate. But as a matter of practicality, we think it’s worthwhile for the Bitdrome team to make nice.
It’s not so much even a question of cribbing code, but far more pragmatic. If Bitdrome devs run into questions about running a ve(3, 3) protocol down the line, then why poison the channel of communication with VELO/AERO devs, who are most experienced at operating it in public? Bad tactics.
But enough edification, we know you degenerates only care to know why you might consider YOLO-ing into BitDrome?
The project is mostly gathering buzz because they are hinting overtly at an airdrop.
It appears premature to undertake any onchain activities based on idle Telegram chatter. After all, they didn’t even hint at any airdrops for usage so far, just for veCRV holders. So no reason to bridge yet.
But it’s certainly a protocol worth watching. Bitcoin DeFi is a very bullish narrative in our estimation. The team appear to be active and knowledgeable. Bitdrome has a lot of the right tailwinds to be big!
Disclaimers! Of mentioned tokens, author is long BTC, ETH, CRV, AERO and VELO