July 22, 2022: Wild Mass Guessing π€ͺπ―
@NewMichWill Interview Revives Speculation on $crvUSD
Even though weβve known for months a Curve stablecoin is coming, social media exploded yesterday on news that a Curve stablecoin is coming. One beautiful day weβll see evidence of the efficient markets hypothesis at work in the crypto world, but today is not that day.
At any rate, the video is finally up!
As with any @newmichwill interview, itβs chock full of goodies. Whenever smarter people than you are talking, you can do yourselves a favor by shutting up and listening, as many times as needed, until you start to catch up.
Itβs particularly funny because the media reports of the interview reported he only dropped one single bit of alfa, that a Curve stablecoin would be over-collateralized. Yet look at the text of the actual interviewβ¦
βItβs better to tell all the details when itβs actually ready, although itβs close to being ready. Butβ¦ well, one thing, itβs going to be an over-collateralized design, itβs the most reliable one I think. And second thingβ¦β
β¦second thingβ¦? π
βAnd second thing, based on what we know about how automatic market making works, we tried to rethink how liquidations can work. Doing it in some way which no one thought about I would say.β
The alfa did stop there, but he did wax philosophical about the design of Aave and how a stablecoin intereacts with a lending protocol.
Again, clear your calendar and learn from the boss.
Let the wild mass guessing begin! If you want to sculpt an elephant, start by removing everything that doesnβt look like an elephant:
Hey, we said wrong answers only! Shame on the person who nailed it.
A lot of idle chatter hoped for veCRV to become usable as collateral.
Given the locking mechanics, others predicted veCRV was likely to sit downstream.
Alu continued the conversationβ¦
Diligent Deer offered detailed thoughtsβ¦
To add more speculation to the discussion, last quarter we asked big brains @crypto_condom and @fiddy to speculate on the design of a Curve stablecoin:
The concept of cvxCRV as collateral also got some discussion.
Others looked not so much at the design of the stablecoin, but how it could benefit the broader Curve flywheel.
Thereβs already been some interesting spillover effects. We discussed a few days ago how Wonderland was planning to liquidate their $CVX. Some evidence suggests it got OTCβed to Sifu to cover a large short position. Did $crvUSD news do this?
Whatever is going on in Wonderland, itβs been a rough go for flywheel haters.
If the bear market caused $CRV haters to emerge out of the woodwork, yesterday we witnessed the opposite effect. Suddenly everybody was rushing to out themselves as $CRV fans, even the king himself.
Perhaps the best strategy is not so much to try to predict the mechanics of $crvUSD, but to grab a bag of $CRV in one hand, a bag of popcorn in the other, and just enjoy the ride.
To close, weβll drop some public statements about a very different stablecoin with a more clear timeline.
