Feb. 1, 2022: Lucky Money 压岁钱 🐅🧧
Which Protocols Will Be Gifting the Flywheel Cash in the Lunar New Year?
新年快乐, 祝旧正月, + 새해 복 많이 받으세요!
In China, it is common to gift 压岁钱🧧 to celebrate the year of the tiger, little red envelopes full of money.
There’s only one flywheel with a good track record of routinely giving you little packets of money. If you’ve found your way into the Curve / Convex / Votium flywheel and joined the Union, you’re already accustomed to receiving gifts of money all year long.
Everybody seems to appreciate income producing assets, hence we’re seeing nearly every protocol that survived last week’s market dip trying to get their mitts on Convex. Yesterday we noted the steps Abracadabra is taking to try and grab $CVX from treasuries that are winding down.
It’s not just individuals who may attempt to front-run these moves. A lot of big protocols are making big Convex plays themselves.
The FRAX community, who bribed $5.71MM last round, also noticed the price of Convex dipped for reasons unknown. They quickly tossed up a $25MM proposal to buy more CVX.
Be careful with your expectations, though. Not all forum proposals go anywhere. This FRAX proposal got nearly unanimous support, but doesn’t look to have reached quorum in time.
Even absent this proposal, FRAX is doing more than enough to enmesh itself deeply into the CVX flywheel.
Once CVX joins the flywheel efficiently, you may wind up with several more red envelopes lying around.
If you’re aiming to capitalize on this by joining the new FXSETH v2 pool on Curve, be particularly careful. Despite getting a gauge vote passed, there’s only $5K worth of liquidity in the pool so far. It therefore wouldn’t be advisable to join unless you know what you’re doing and add liquidity carefully in an extremely balanced fashion.
Season 2 of Curve Wars incoming? It’s difficult to see clearly through the fog of the Curve Wars. Several people have alleged Yearn is also looking to spend $25MM buying CVX, but the link cited appears to be dead or private, so we can’t verify.
We can say for certain that the YFIETH pool on Curve is on its way, and this pool has a more robust $500K already deposited into it.
The gold standard in parsing truth from rumor on this front remains daocvx.com built by @DefiDividends, which does a fantastic job of following the cycle from rumor to truth.
For instance, CongruentFi has tiptoed quietly into the battleground via OTC transactions.
Another hypothetical warhorse is Paraswap.
Their proposal has been winding its way through the governance forums since last year and appears to credibly be moving towards completion.
Vesq has also stated their intentions clearly enough to be more than a rumor.
All the aforementioned all appear to be in some stage of consideration that could be worth celebrating.
Other participants may be interested in the flywheel, but doing so outside of Votium. T Network and Angle are possibly participating more directly via bribe.crv.finance
There’s tons of hypothetical participants to the Curve Wars that are fun to think about, but far less credible at this stage.
AAVE appears to be too early in the discussion to yet get excited. Still, they launched an AAVE/palStkAAVE v2 Factory Pool and may want to do something with it.
Similarly, the launch of the new DYDX/ETH Factory pool is exciting, but doesn’t necessarily foretell any upcoming activity. We similarly know Redacted is playing with CVX, but it doesn’t necessitate them becoming a co-belligerent in the wars.
What would happen if Curve joined the fray?
Is that even physically possible?
Or what if erstwhile superpower USA prints to play?
The Convex Wars are plenty exciting without the need to dream up participants. We want everybody to be safe and tethered to reality this New Year.
On this subject, we want to remind everybody that, for your safety, you should only ape into protocols where admins are unable to access to your LP position. Even if the admins are well-intentioned, they may find themselves pressured by hostile “regulators” who want a piece of the action for themselves.
We have to be parse our words carefully here, because superstition dictates you avoid negative language in the Lunar Year and opt instead for euphemistic language.
So here’s what we can say (positively):
Engage with people who spread facts. Many great users understand basic facts about Curve, such as the fact that the Emergency DAO is external to Curve with limited powers. Or that Curve has always been built in a way that only you can access your funds. People who understand these facts are worthy of your time and energy.
People who represent these facts in a different manner are sons of female dogs.