Dec. 13, 2021: Convex Cracks Top 100🔝💯
$CVX ascendant on $CRV v2 pool and major protocol buys
What a wild weekend for $CVX, a new top 100 token per CoinGecko. If you weren’t paying attention, here’s what you missed:
As slipped last week, the CVXETH Curve v2 launched shortly thereafter. This is really important for users who want to get into $CVX, because most centralized services don’t support Convex. Thanks to the power of Curve v2, it doesn’t matter.
Up to $3MM worth of liquidity has been added already, and rewards haven’t even materialized.
TriCrypto has been a wonderful v2 pool, but crypto purists object to seeing their yield from BTC and ETH dragged down due to the reckless ponzinomics at the root of dollarcoins. CRVETH and CVXETH pools now allow liquidity farmers to earn yield while maintaining exposure to the greatest tokens in DeFi.
We previously discussed how each new v2 pool opens up new routing options — or for high frequency traders, potential arbitrage opportunities. The asset routing map looks even sexier today. Each new v2 pool provides a factorial increase in the number of routes — $CVX can now be routed natively through v2 pools to each of the five existing assets (plus hundreds of other routes through v1 pools).
Very soon it will become impractical to maintain this map. The Curve Twitter account has solid track record in terms of leaked alpha. Unless it’s a clever bait and switch, the permissionless v2 factory is next in line for Curve’s roadmap. The diagram above will grow from six nodes to hundreds? Thousands? Bears who never learned about Metcalfe’s law in utter disbelief.
While Curve focuses on building out the backbone of DeFi, Convex is proving its case as a top 100 token by connecting various DeFi protocols with Curve. The supply of $CVX is unbelievably scarce (100MM total) and the demand is sky-high. There’s tons of projects, but not enough $CVX to feed everybody.
Nor are these protocols merely dipping their toes in. If I may be permitted a boomer reference, this is a battle for the Iron Throne. At least five protocols are grabbing a 1% or greater stake. Just this morning Wonderland announced a 1MM OTC purchase.
The use of $CVX is deeply embedded into several protocols’ growth. Consider the plans shared by $FRAX:
When people say you’re still early to crypto, the mad dash for $CVX is proof positive. 99% of humans alive today don’t recognize the future of finance is being actively battled over right now.
You’ve either chosen to participate, in which case your portfolio is probably feeling pretty great right now. Or you chose to watch from the sidelines. If so… well… maybe take notes about the patterns you observed here so you don’t miss the next party.
Anybody with CVX is probably further elated by the pure hockey stick trajectory of Votium bribes.
People wonder how long the bribes can continue this up-and-to-the-right growth. The fact of the matter is, bribe games are still exceptionally early. It’s a stunningly slick growth hack.
Consider: if a protocol is concerned their bribe will not be effective, they have the option of both bribing and claiming their own bribe to serve as a form of insurance. Ergo, there’s an optimal amount of $vlCVX to own. Perhaps a modeling mission for the stalwart Llama Airforce? Create a crash course on the game theory of Votium bribery, to educate protocols which are slower on the uptake.
With all these beneficent headwinds, it’s clear how $CVX propelled itself into the top 100. Will we see a $CRV - $CVX flippening?
If you’re wondering, it’s worth noting that CoinGecko excludes the effect of veCRV — most $CRV is inaccessible for nearly four years, monkeys with these numbers a bit.
Either way, both $CRV and $CVX are becoming extremely scarce.
What can you do? If you are new and want to get involved, try following the sharpest minds in the business to get a sense of optimal strategies for newcomers.
If you’re staking, a newly popular strategy is to sit back and show off your flywheel-themed art.
Degenerational wealth at its finest.
Disclaimers! Author is a flywheel maximalist