August 29, 2024: Easy as ABC 🏫🔤
Reserve Protocol takes the lead in the Curve Wars
Few have survived this protracted crypto bear market.
The popular narrative has it that retail is largely gone. They’re strategically waiting on the sidelines, waiting to make their grand return until the next cycle’s absolute picotop, when they’ll again mortgage their house to buy in and lose it all.
The retail who are still around are presumed to be a smattering of diehards. You have plenty of true believers who got crypto rich in previous cycles and won’t go anywhere. The rest joined in the previous cycle and are willing to stick it out.
Perhaps this narrative is true, perhaps not.
The actual data shows that early 2024 saw a small resurgence that has since stalled out, making current conditions a half-hearted retread of DeFi Summer.
If you look at both the narrative and the data, you can understand why builders are not exactly rushing to build atop DeFi.
Narrative is important insofar as it helps to attract investors. The data is important in corroborating the narrative in the investor pitch.
“Sorry to break it to you DeFi, but whatever “it” is… you don’t got it. Check back in 2025 maybe…”
Yet we still did see something like a pump in 2024. Even though the climate is not perfect, some money did flow into the space, and stablecoin supply is at an all time high.
Somebody benefited, but who?
Who proved so savvy as to successfully catch this microtrend in 2024?
One such winner is Reserve Protocol. The team has over 6x-ed its RToken market cap this year, enjoying an up-only hockey stick growth story in 2024. Study Reserve!
What are the savviest builders in DeFi doing with this newfound momentum? They just outlined that ABC Labs, the investment arm of Reserve (no affiliation with ABC News), just completed a major strategic acquisition into Curve for the purpose of “increasing the protocol’s ability to incentivize onchain RToken liquidity throughout the Curve ecosystem.”
In the piece, authored by Naga King (remember him?), Reserve noted the RToken liquidity pools on Curve currently hold approximately $25 million in assets and growing, primarily on Ethereum mainnet. The investment, part of a previously announced $20 million strategy, now gives Reserve “the most voting power of any non-founder entity in the Curve DAO.”
If you were following the recent lockening, you may have observed that this particular lock came in the form of a massive purchase of $CRV which was locked as $sdCRV.
From Sovereign Stack’s newsletter, (a key follow for updates on Reserve!)
The strategic move also included a purchase of almost a million $SDT, locked for four years.
The hardcore builders left in DeFi are relatively few and far between, as we outlined earlier, but they have a variety of productive and useful DeFi tokens available to snap up at a generational discount. Stake DAO’s SDT is one such token.
Study protocols strategically scooping up these discounts…
$sdCRV has proven popular in the recent craze of locking.
Recent depegs of other $CRV wrappers have also seen traders buying a discount, all great deals for protocols who foresee strategic need to bootstrap liquidity in the future.
Reserve in particular has seen good success bootstrapping liquidity on Curve. As stablecoin yield farmers, we’ve enjoyed farming a variety of Reserve’s pools. Stablecoin yield farming is always fraught, given the risk of depegs. The alphabet soup of stablecoins can confuse investors.
For at least our sake, we personally feel a lot of confidence when we find a good yielding pool containing Reserve’s various stablecoins, as we have a decent understanding of the robust underlying mechanism of Reserve’s rTokens. Not financial advice of course!
One big reason that ABC Labs has been paying attention to Curve is the “rise of high base APY pools” spurred by the rise of NG pools.
Want to know more about Reserve? Although a good Wallfacer might play their cards close to the vest, here they let loose in this interview with ABC Labs CEO Thomas Mattimore:
Subscribe also to the “State of Reserve” ecosystem update:
Finally, should you degens buy Reserve’s native RSR to speculate on Reserve’s success? First of all, we don’t do financial advice here.
Important Disclaimer: Author holds some RSR and yield farms some RTokens.