A surprising, and unfortunate, update on yesterday’s article…
The large dump of $yCRV turned out to be the ordinarily flawless team inadvertently fat fingering a multisig transaction.
The team responsibly disclosed details of the mishap, which didn’t directly affect LPs (except to the extent that yCRV remains about 15% depegged.)
Their recovery efforts to send a message onchain to addresses that profited from the events would even become a minor meme.
The post-mortem highlighted a few takeaways.
We have to confess, when we were diving into onchain data yesterday to try to figure out what specifically happened in this transaction, we also threw out hands up and capitulated. Look at this mental illness, via EigenPhi’s transaction visualizer.
How many of you could honestly say, if you were multisigners, you would have caught the error in advance if asked to multisign? Most of us, facing what’s supposed to be an ordinary transaction and slammed by a busy holiday schedule, would have simply smashed “approve.”
Which brings us to…
Conic
Maybe you caught the pump? Or, perhaps, you were patiently farming $CNC since the hack and waiting for a resurgence?
After several months in audit, Conic Finance announced their relaunch.
It’s exciting for several reasons. First off, we’re excited because we’re big fans of the Conic team and really respected what they’d managed to build. Seeing the team sidelined because of such an unfortunate hack was really quite tragic.
Otherwise, we’re interested in the spillover effects on $crvUSD, as it could once again upend the landscape for the incipient stablecoin.
Before the hack, the primary destination for newly minted $crvUSD was Conic omnipools. Since the hack this role has been absorbed by the Pendle/Silo flywheel. It’s too early to say how the landscape might look after the Conic relaunch,.
The immediate next step will be voters selecting which omnipools to revive.
From here, the winners will advance to further votes to determine which specific Curve pools will be part of the omnipools, and in what proportion.
The biggest thing $crvUSD needs to break $1 billion in TVL is more liquidity sinks, so that $crvUSD gets taken off the market in a manner that doesn’t touch the Peg Keeper pools.
The prior $crvUSD omnipool actually worked to drive up borrow rates. The majority of $crvUSD liquidity found its way to the Conic omnipool, which was then deposited one-sided into the Peg Keeper pools, causing $crvUSD to depeg downwards and rates to consequently rise.
This could have been counterbalanced by $USDC/$USDT omnipools depositing at size into $crvUSD Peg Keeper pools, or the $crvUSD omnipool adding more pools that weren’t Peg Keeper pools.
Keep an eye out for these votes, as they may have outsized influence on the ultimate direction of $crvUSD!
Disclaimers! Author is exposed to $yCRV and $CNC