December 12, 2023: Depeg Season ❄️🧩
Wrapped $CRV tokens’ peg under pressure amidst hints of bull market
Maybe it’s just early onset dementia talking, but in all the years of writing this Curve newsletter, we don’t recall ever having to write an article about the negative repercussions of $CRV prices going up.
If you’re new here, note that we don’t use this newsletter as a forum to speculate on crypto prices
::whoosh of mass unsubscribes::
We wouldn’t even bring it up, except to note that the short period of positive price action on $CRV perhaps had one other unexpected consequence. It’s depeg season!
All of the major $CRV wrappers have seen their peg threatened to some degree since the most recent bull turn.
Stake DAO’s $sdCRV had historically held the best peg, but presently sits just a tick under $cvxCRV, which is intended as a softer pegged derivative.
Meanwhile $yCRV has been trading like a common memecoin.
A 1.3MM token exit, which would be triggered via a CowSwap settlement transaction, would dump so much it would briefly trigger the rare “SOS” flag on DefiWars
Is it safe to hypothesize that one consequence of a roaring bull market may be $CRV wrappers facing heavier pressure on their peg? And what does it all mean for your holiday shopping?