Get ready for the most interesting debate in DeFi.
DeFi Cheetah and Winter Soldier, two mega-brains in crypto, have been fighting a massive thread war over the past month.
Don’t tell Ser Cochran, but for all Twitter’s benefits, it’s can be a bit rough to easily browse long-form content. These threads would be far more digestible as fully fleshed out articles.
As a tangle of threads, I assume most people have not tracked the nuances of this fascinating debate. I assume this, because I was unable to decipher it all until setting out to write out these notes.
I’m hopeful I can convince both parties to move to directly debate each other instead of flinging threads past each other, in the same vein as last week’s battle between Benny and DeFi Made Here:
At any rate, I played intern today, attempting to untangle both threads into a smoother outline.
For reference, here are all the threads chronologically. They’ve been helpfully numbered, so I’ll cite the source of the notes throughout.
Cheetah Preamble: (C1)
Cheetah Shot: (C2)
Soldier Shot: (S1)
Cheetah Chaser: (C3)
Soldier Chaser: (S2)
Cheetah Recap: (C4)
Cheetah Theses
Summary of the first two threads by Cheetah, before challenged by Winter Soldier
Pricing Power
Tokenomics
$CRV tokenomics protects Curve against competition (C2:1-13)
Curve’s liquidity-as-a-service: functionalities that solve on-chain liquidity issues (C2:14-19)
Contrast with Uniswap v3 Issues (C2:21-35)
Curve v2 improves on Uniswap v3 through capital efficiency and interoperability (C2:36-40)
Soldier Theses / Cheetah Rebuttals
The Winter Soldier threads, along with Cheetah’s rebuttals where applicable.
THESIS: Curve ponzinomics are unsustainable (S1:3)
Curve ve-tokenomics delays & offloads sell pressure, does not solve it (S1:6-12)
Curve TVL traces emissions
CHEETAH: TVL effect not related to Curve inflation, but industry trends… time will tell for sure (C3:20-21)
CRV emissions > Curve revenue + bribes (S1:13-17)
CHEETAH: This math does not account for locking and all bribes (C3:4-12)
SOLDIER: This is proof of Curve unsustainability (S2:6-12)
Such mechanisms would be unnecessary if fees were sufficient (S2:6-8)
CHEETAH: Refuted, liquidity mining to lower liquidity cost (C4:19)
Economic unsustainability led to Convex (85% TVL, 50% veCRV), preventing redistribution of power (S2:11-12)
CHEETAH: Convex works because it is efficient, and voting is passthrough (C4:22-23)
Curve + protocols rent liquidity with emissions (S1:18-19)
Ve-tokenomics is not favorable to late joiners (S1:20-21)
THESIS: Uniswap has a better business model (S1:4)
Lower cost of liquidity (S1:22-25)
To participate on Curve, protocols must compete with Convex/StakeDAO and pay for liquidity (S2:13-15)
Protocol ecosystem provides more flexibility and innovation. Uniswap symbiotes create new products based on Uniswap mechanisms. (S1:26-32, S2:16, S2:20)
Curve symbiotes designed to extend ponzinomics of CRV (S1:33, S2:17-19)
THESIS: Curve falls short as core DeFi infrastructure for mass/institutional adoption (S2:5)
(1) unsustainable cost structure
(2) high cost of liquidity
(3) unfavorable to future innovation and late entrants
CHEETAH: FraxBP, Convex are examples of how Curve war winners offer incentives to subsidize liquidity (C4:24-27)
We hope this makes it a bit easier to navigate among the various threads and decide for yourself what you think! Now that you understand the context of the debate, weigh in for yourself!
February 1, 2023: DeFi Cheetah vs Winter Soldier 🐆🪖
While I'm Curve aligned I think competition and points of difference between the two product provides consumers with a choice which really depends on how they wish to play the game. The rivalry adds to the drama that is defi.
Well put together, thanks for sharing.