The next interviewee requires no introduction, particularly to enemies of the flywheel. Ser Moon is always first to rush into any Twitter beef. In the crazy world of crypto, itβs any guess how long until we find ourselves as enemies, so we had to knock this interview out while we had the chance..
DefiMoon chats here about life before crypto, the rise of Convex, the fall of Olympus, death spirals, crvUSD, and alfa.
We keep our interviews paywalled for 72 hours, so if youβre unable or unwilling to pay you can check out prior interviews:
π¦ CMC
Whatβs your background, and how did it inform your POV?
π DM
In terms of education I have an economics background, but most of my working life was in the equities and currency trading. Like many other newcomers to crypto, my gateway drug into cryptocurrencies was bitcoin, more specifically bitcoin mining. I had the good fortune to stumble onto to bitcoin relatively early when it was still trading in the low triple digits.
π¦ CMC
Is there any truth to the rumors you are βactively discussed as a clownβ?
π DM
Maybe at the annual Curve death spiral threadoors convention.
π¦ CMC
How did you identify $CVX so early?
π DM
I was following Convex from their early Medium articles, way before the launch. It became clear to me fairly quickly that Convex would get very popular by offering CRV holders a way to earn additional yield without incurring the ongoing gas costs associated with re-locking of veCRV. This was a major problem for many people, and it didn't take long for me to put 2 and 2 together and realize this a major issue was being solved here. The fact that cvxCRV would also be liquid was another big bonus. But the real cherry on top was that CVX would inherit the voting power of that growing pile of veCRV under the control of Convex.
π¦ CMC
What was it like watching the narrative take hold?
π DM
When Convex launched, Yearn was by far the largest hodler of veCRV. Watching Convex overtake Yearn in veCRV within the first 30-60 days was exhilarating for me for a few reasons. As far as I was concerned, Yearn's relationship with Curve was of a parasitic nature. Yearn deposits simply used their mammoth TVL to farm-sell CRV, which in itself isn't an issue, except that Yearn was doing it with billion of $, and at that scale it very much was an existential problem for the Curve ecosystem. So for this reason, watching Convex swoop in and save Curve from the parasitic tentacles of Yearn was very liberating and exciting.
π¦ CMC
What aspects of CRV/CVX need to be better understood by the crypto community ?
π DM
As far as Curve, the most misunderstood aspect seem to be the purpose and nature of CRV emissions. In my opinion, truly functional DAOs can only be built over long periods of time where committed investors have a fair shot at building up their skin in the game and earn their place in the ecosystem. Curve's gauge voting system + emissions model accomplishes this task very well!
π¦ CMC
Youβve had some entertaining beefs on Twitter. Any victory laps you want to take? Any bad takes you want to retract?
π DM
Without a doubt one of the most fascinating and entertaining beefs on Twitter was between myself and the OHM influencer/investors. I was feeling a little naughty one evening and decided to hop into the Ohm discord to see what the prevailing narrative was among the Ohmies, and I came upon a comment from one fella who said I had rekted the whole scheme with a few Tweets, I remember laughing out loud after reading that.
π¦ CMC
Is there a type of argument for a βCurve Death Spiralβ that would convince you to change your mind? Whatβs the most bearish case for Curve you can make?
π DM
The most bearish thing I can think of is an exploit of some sort. There are very few DeFi projects that have a pristine track record of no exploits. In an industry that is saturated with exploits and hacks, an impeccable track record is worth A LOT! If Curve can hold onto this spotless resume, it will only grow more reputable with time.
Barring any unforeseen exploits, I can't see a Curve death spiral scenario playing out as 60% of current CRV supply is locked as veCRV effectively forever due to perpetual relocks, the biggest re-locker being Convex of course.
Secondly, CRV is limited is supply and can be staked to receive Curve protocol fees, so there will always be buyers, especially at lower prices.
Thirdly, while existing and newly issued CRV continues to be re-locked at a steady pace, CRV emissions decline by 15% every year, so over the mid to long-term, CRV available for sale will decline.
There are many forces at work within the Curve ecosystem which prevent a so-called "death spiral." Even in a bear market where yields are in overall decline, liquidity on Curve/Convex is still very sticky due to perceived safety. Given how many protocols have been exploited already this year, safety these days is priority number one, and Curve/Convex have that in spades.
π¦ CMC
Any interesting protocols you are watching that arenβt on peopleβs radar? Gib alpha!
π DM
Decentralized leverage trading platforms and leverage farming protocols are of great of interest, especially those that support Curve/Convex. Gearbox would be one protocol I've been keeping tabs on for the past few months. Being able to farm on Curve/Convex with 4-5x your capital is bound to attract a lot of interest and bring a lot of new TVL into the Curve ecosystem.
As for leveraged trading, Gains Network is a lesser known protocol on Polygon which allows traders to place bets on forex, stocks and crypto with 150x leverage. In an environment where established, centralized leveraged platforms like Binance and FTX are pressured by regulators to lower leverage and suffer from an increasing compliance burden, decentralized alternatives should flourish.
π¦ CMC
What do you expect from $crvUSD?
π DM
I expect to see crvUSD becoming the dominant stablecoin within the Curve ecosystem relatively quickly, and I really hope crvUSD will have a native interest rate which will make it attractive to hold over other stablecoins. DAI's native interest rate in the early days is what drew me to MakerDAO, without that benefit, I don't think I would have ever bothered opening up a vault, or converting my existing stables to DAI and taking on all the extra risk. I also expect to that veCRV holders will have full control over crvUSD parameters and stand to profit directly from crvUSD issuance. At present, the stablecoin market is dominated by fiat-backed stablecoins that have all sorts of censorship and custodian risks, but Curve, being the most established and trustworthy decentralized stablecoin exchange, is in a unique position to deliver a truly decentralized and very liquid stablecoin which can serve as a building block for all sorts of novel DeFi applications.