January 9, 2024: FUD Around, Find Out 🤼🥊
Why the briefly hyped Mich vs. Sifu battle failed to materialize
Just yesterday, I was lamenting the notably pathetic state of Curve doomsayers following the laughable “Founder Buys Token” FUD.
I should have called out the pattern though. Curve FUD-storms usually come in waves, with the weakest shot being the first fired.
Sure enough, yesterday we were treated to the latest drop by Defi_Made_Here.
Ser Made Here often plays the role of heel within the community, but compared with the median death spiral00r, we always appreciate that Made Here brings their A-game. The account often delivers thoroughly researched, lightly humorous, and detailed threads, all of which easily land them in the uppermost decile of Curve critics. Therefore we consider it worth engaging, whether or not you judge the author to have disingenuous motives.
By now we mostly know what to expect from Ser Made Here… a laundry list of cranky tweets pushing a slanted narrative, some vague existential doomsaying about Curve that gets shortly disproven, all of which is bookended by some ostensibly positive tweets to feign a constructive stance towards the protocol.
When compared with weaksauce competition like yesterday’s “Founder Buys $CRV” FUD, the thread stands out as an exquisite work of fine art. I mean, at least with this thread we can enjoy an intellectually coherent narrative and some high quality memework.
I’d argue the people who dismiss these threads out of hand as “FUD” without diving into them are doing themselves a disservice. At minimum, it’s worth studying the overall style and format alone. Ser Made Here is teaching a masterclass in how to thread for engagement, as the numbers show.
Though even the author admits there are easier ways to appeal to the baser instincts of Crypto 𝕏.
The extremely thin veneer of sandwiching a negative thread bookended by voicing ostensible support Curve is also an impressively nuanced tactic. In doing so, Ser Made Here manages to walk the razors edge or not getting completely tuned out, keeping themselves within spitting distance of the seats of power. For example, Mich once previously blocked the account, but then unblocked after vocal complaint.
Aspiring thot leaders should really be taking notes on this strategem. A lot of free social karma is sitting on the table for whomever adapts the format against other protocols… where is our $UNI concern troll?
At any rate, as I’ve said for a long time, it’s worth elevating even half-decent anti-$CRV takes. For one… Curve critics are broadly correct about some points. $CRV as a token has seen its fortunes lag in comparison with other competitors, so there must be some kernel of truth lying amidst the confusing web of anti-$CRV misunderstandings and innumeracy. Better we understand and internalize these critiques than dismiss them outright.
Funny enough, as anti-$CRV rants go, Ser Made Here’s complaints are weak sauce compared with the vitriol I’ve seen on occasion from within the gates. Curve team members and allies often level far harsher critiques, and these are often better centered over the target. The point is that we need more FUD, and preferably of a higher quality, if we’re to continue growing and hold rank as the centerpiece of DeFi.
But before we nitpick about specifics, we’ll review the thread as a whole, since the “sum of its parts” is more important than any single post. Our take mostly maps with this…
The overall structure of the thread is:
1-11: Background, mostly narrative tablesetting. We may personally disagree with some of the characterization of prior events, but history is open to some interpretation and mostly immaterial. It’s merely setting a context for the crux of the thread.
12-18: The real meat of the thread is imagining a hypothetical attack by Sifu against $CRV
19-24: The thread closes by meandering into some conclusions about $crvUSD
The main thesis is that if a hypothetical “Mich vs Sifu” played out as imagined, then token price might go down and bad things™️ might happen.
As it happens though, reality has mostly already invalidated this thread before I could even put pixels to screen. The fight was heavily promoted, but turned out as a big nothingburger.
The idea of framing it as “Mich vs Sifu” as a sort of replay of the “Mich vs Avi” drama from last year is a clever framing and bespoke clickbait. Midwits on Crypto 𝕏 may not be able to easily comprehend the complexities of Curve ponzinomics, but a duel between two major characters is quite a vivid sight in the mind’s eye.
Sadly, a closer analysis of their respective fighting styles suggests it may never have been the marquis matchup promoters had suggested.
If you rip out the beating heart of this thread, the thread as a whole becomes quite a bit weaker. The author might counter that such an attack vector remains plausible by a different actor. Possibly true, but too many times crying wolf and you risk torching your credibility.
Actually, scratch that. There’s a bottomless appetite for the “this month must surely be the end of $CRV!” clickbait. And the audience doesn’t even mind if they get proven wrong each time, it just makes the haters more noticeably desperate for their next dopamine hit. While rational beings might eventually catch on, the skeptics will just continue doing the same thing and expecting different results. Read When Prophecy Fails and you understand how $CRV haters double down each time they are fooled. Maybe this time you’ll kick the football, Charlie Brown…
The big brained takeaway, therefore, is that if $CRV’s enemies have an inexhaustible reservoir of enmity, best to move the activity onto Curve itself to profit off it.
So at the 10K foot view, we have a blockbuster thread that continues to earn plaudits from the Curve haters, even if the centerpiece has already been debunked by reality.
Meanwhile, $CRV proponents are mostly shrugging it off, having seen too many examples of predictions missing the mark. As Yogi Berra allegedly said, “it’s tough to make predictions, especially about the future.”
Granted, it’s difficult to time the demolition of any particular protocol. But it’s not impossible. 0xLlam4 famously prophesied the death of so many “Curve Killers,” and has been proven right many times over.
Meanwhile Curve Death Spiral00rs are still waiting for their first scalp. This has yet to materialize despite the truly improbable Vyper hack, an event far more catastrophic than any of the doomsday scenarios prophesied by critics. Curve’s still ticking… What is the threshold for Curve’s extraordinary track record for resiliency to debunk the naysayers?
All the same, we’d challenge Curve proponents to not grow complacent and dismiss the thread out of hand. Just because the pronouncements of doom have been consistently wrong doesn’t mean they’ll be wrong the next time. We’d encourage the community to entertain skeptical viewpoints even from oft-discredited voices, given that it only requires one fatal strike to fell a DeFi protocol.
We think the whole thread stands out as an example of a gish gallop. Therefore, while we don’t have enough hours in the day to devote attention to every single post, we’ll highlight a few examples where we can expose the technique. Let’s proceed to annotate with some good-natured comments where they’re due.
We could quibble with the “could not sell, bad image” phrasing. For starters, we suspect Mich is smart enough to have found liquidity and could have sold off if he so desired.
But our main nitpick with this… if Mich was trying to avoid a “bad image” by not selling, then seriously, his plan has backfired spectacularly! The crypto community has unfortunately already developed a distorted and outlandish view of Mich. If avoiding a “bad image” is truly his intent, then we might have to seriously question his competence!
We all know the crypto rules dictate that founders get a bad image no matter what action they take…
The median DeFi user view of Mich has been contorted into a truly obscene caricature… some sort of wicked debt-addled degenerate, who feeds his addiction for buying mansions wholesale by concocting flimsy Rube Goldberg devices that uses overly complex math to obscure his proclivity to somehow dump on his userbase.
It’s really quite a shame that his haters have successfully fabricated such a cartoonishly villanous image. The people who take the time to know Mich through his relentless engagement in the Telegram really get to know the real Egorov: humorous, hard-working, and insanely bright. It’s quite rare that anybody who enters crypto has access to communicate with such a talent who is so responsive to his userbase. We hope this image of the diligent architect ultimately gains mindshare among the crypto community.
At any rate, we don’t think any sort of optics is any impediment to Mich’s choice not to sell. Plenty of other DeFi founders dump, and the cultlike nature of crypto demonstrates supporters will gladly step up to defend getting dumped on actively.
Our understanding is that Mich uses lending protocols not because his hand is forced, but because he simply enjoys using DeFi protocols as a power user. He’s arguably the most experienced of any such user, playing these games for years at high stakes and max difficultym while getting quite good at never hitting the dreaded “game over” screen. Here, though, we risk veering into the realm of interpretation ourselves.
At any rate, if “bad image” is the only reason Mich is not selling, then buckle up… Mich may as well start loading up the dump trucks.
The timeline presented here is inaccurate and revisionist, although in this case Ser Made Here’s narrative is arguably more charitable towards Curve than reality.
In this telling, the “$CRV price started tanking” following the hack. A look at the charts, however demonstrates the hack was scarcely a blip amidst a major two year downtrend.
The prolonged erasure of liquidity from DeFi since last cycle has had far more impact on Curve price overall than even the results of the existential hack.
So while the real story could actually have been made more apocalyptic, it doesn’t fit the thread’s tidy narrative, so it’s an instance where the facts get cherry picked to suit the story.
A nitpick, but the phrase “only option” should instantly set off a reader's BS detector, as it’s clearly emotionally charged language designed to push a narrative.
In this case, it’s apparently speculative, because it also happens to be incorrect. We personally know several whales who stepped up and offered to float him a personal loan if he was actually in the dire straits as portrayed by the Crypto 𝕏. Ergo, we know he had other options on the table, options which he declined to pursue for whatever reason. Presuming Mich to be a rational actor, we can only infer he went with what he considered the “best” option among several.
But that would lessen the dramatic tone of the tweet! There’s quite a few posts that share this issue, but we won’t recount them all…
No contention here, but we’re in a position to clarify the ambiguity.
I happened to meet with Ser Aiham of Silo during EthCC, several weeks before the Curve hack. He’d discussed in-depth his interest in making this “bet the protocol” type move, particularly citing the expenses involved in bootstrapping and stabilizing their own stablecoin versus simply leaning into $crvUSD.
It turned out to be a wonderful bet. Thanks to the long winter, fewer than 100 DeFi protocols currently have >$100MM TVL, Silo Finance ranking 53rd with a healthy $225MM (which by my back of the envelope math makes Mich a minority user of the platform).
At any rate, my experience (plus Silo’s Github commit history) reveals this was a broader strategic play that long predated the hack.
The idea of framing this as a Mich vs Sifu battle is certainly compelling, in the way a boxing promoter might salivate about ticket sales for a marquis matchup.
However, as we discussed above, reality has already rendered moot all the speculation about what Sifu might do. The collapse of the central point in the thread should cause neutral observers to apply greater scrutiny to the remainder, even if partisans are already sold one way or the other.
We disagree with this premise. Yes, Mich has shown a tendency to permissionlessly deposit rewards, but this is not part of the critical path for the preponderance of crvUSD liquidity rewards.
Mich adds some bonus rewards as a means of kickstarting activity before the pools’ gauges get approved or otherwise hooked up to the DAO’s pipeline. But the bulk of funding for $crvUSD pools is from DAO token emissions being directed to the various pools, which of course have their own complex chain of incentives.
Agreed, it’s not sustainable for him to spike rewards like this ad infinitum. But if Mich weren’t pushing these early deposit bonuses, the pools would arrive at the same destination, but merely take a few extra weeks to get off the ground.
He’s impatient, like any good founder, and he’s using his largesse to hasten the process of $crvUSD adoption by a couple of extra weeks. Great to see.
Besides, shouldn’t the puritanical critics decrying his use of $CRV on lending markets be jubliant? More $CRV slips out of his reckless fingers and avoids the pockets of moneylenders!
If Curve passes this “stress test,” will the author will flip bullish?
Since the “February OTC unlock” FUD is inevitably going mainstream, I’ll lay out my predictions for next month.
I’ll predict that sometime in February, a group of $CRV shorters, amidst another “organic” outbreak of C𝕏 FUD about the OTC unlock, will once again make a coordinated effort to death spiral $CRV. After maybe a week or so, they’ll fail and give up, probably net losing money in their quixotic campaign. Then we’ll get a few months respite before they repeat the process.
I feel quite comfortable predicting this, because they’ve repeated this charade like clockwork for years now.
As for the actions of OTC investors, I’ll predict their actual behavior in February basically amounts to a non-incident. Some satisfied investors will quietly sell off at a profit, their sell pressure getting lost among ordinary daily trading volumes. Some will keep holding, some will reinvest around the flywheel, and some will buy more.
I feel comfortable predicting this particular outcome because it maps to the closest analog, which is the historical vlCVX unlock FUD. This scattershot results is basically how it all played out, with unlocks happening in pedestrian fashion (only in this particular case the FUD was due to CVX price going down, whereas here CRV price has magically gone up).
At any rate, if we were traders (we’re not) we’d probably suggest to set up $CRV shorts ourselves in late January since the death spiral000rs are so predictable here (NOT FINANCIAL ADVICE). As we’re not traders, we don’t follow this subject too closely, but there are people who track it diligently if you want to do more research.
Complete agreement!
Although the magic of 𝕏 engagement means the “ticking time bomb” headline gets 200K views, while the nice words at the close muster just 7K.
Once again, we wouldn’t have devoted so much ink towards a thread if it didn’t have any merit. In many ways a Rorschach test, with material for both haters and fans to enjoy. At any rate, we urge you to check it out, draw your own conclusions, and drop us your thoughts!