January 26, 2023: 24 Hours of Pegging 😳💦
Lessons in repegging from $clevCVX, $cvxCRV, and $sdCRV
Devs are doing something! After the bear markets worsened some depegs, is it too soon to declare repegging season?
$clevCVX
Perhaps there’s no hotter token to start 2023 than 0xCLever’s $CLEV
Price action aside, the real exciting “up only” chart is the action for the $clevCVX peg.
How on earth did $CLEV go from a 72% peg to nearly 90% in the span of a day?
The answer is simple: bribery.
A few things happened here. For one, the gauge just kicked in, which means that there’s a rather short window where people haven’t noticed, and the first people in the pool get the astronomical APY all to themselves, as we covered yesterday.
Second, the $CLEV team was able to get good mileage out of birbs. At the moment, bribing remains super effective!
Thanks to birb efficiency, it didn’t even cost all that much for the team to get a lot of bang for their $CLEV. Splash five figures in Washington DC and you can’t get a road named after you… but in DeFi it can make a difference.
While heavy incentives can only reinforce a good peg mechanism, they cannot force a peg to 100% if it’s not compatible. Here
argues why $clevCVX should rightly trade below peg:Yet if you see a token too far below its peg and you have reason to suspect it will repeg, consider buying.
If you’re interested in farming $CLEV, keep in mind that yield farming is not a lazy person’s game. DeFi an active game, and requires you to stay on top of trends and adjust strategies as conditions change. Here are a few notes from the 0xCLever team to heed:
And you if you’re feeling FOMO, you might pay attention to related project $CTR…
$cvxCRV
In other big peg news, Convex released their new $cvxCRV wrapper just weeks after announcing it. Again, DeFi not being a passive endeavor, this requires some action from LPs. If you’re staked on Convex…
Or if you have some uCRV from Llama Airforce…
The juice is probably worth the squeeze in this instance. The most notable new feature is the ability to select the nature of your returns — more governance tokens ($CRV/$CVX) or more stables ($3CRV).
This new optionality may give rise to Fiddy’s Second Law… his first law being the Tether ratio in 3pool correlating with the price of ETH.
The new wrapper may have helped the $cvxCRV peg a bit, but any action on this front to date is more subtle than the $CLEV action above.
The $cvxCRV discount has been a known quantity for the token’s entire existence, but it hasn’t blunted its popularity.
An important factor we note is the devs doing something angle. If your favorite project has depegged and devs have jumped ship, you should also run away. If the devs are of the “100x” variety and have a plan, you at least have a fighting chance at a repeg.
$sdCRV
Finally, a quick lesson in jumping on opportunity. The $sdCRV peg is ordinarily very strong, generally holding within a few percentage points of 100%. Yet in the past day, it dipped out of the blue.
Three protocols with an itchy trigger finger happened to see this as opportunity and jumped in quickly to buy.
The StakeDAO team confirms these were Reserve Protocol, Inverse Finance, and Moneta, all of whom plan to vote for their gauge and purchase more $sdCRV over time.
It’s a demonstration that a depeg can actually be an opportunity. Unless it’s a disaster. Choose wisely, and remember none of this is financial advice!
Disclaimers! Author has exposure to $cvxCRV and $sdCRV, and he hopes also some $CLEV but can’t find it