June 28, 2021: Running to the Front ππ
Winning DeFi strategies include spoofing, DDOS-ing, and arbitraging
Today we review some discussions about optimum strategies in DeFi. Of course, remember that discussions on Twitter may have errors, so always DYOR!
V3 Optimization
@Luciano_vPEPO dropped a thoughtful thread over the weekend detailing various advanced trading strategies on platforms where users often struggle to make profit.
Strategies includeβ¦
Front-running
Spoofing:
DDOS:
Some of these strategies even appear to be in use today.
Whether or not it was technically spoofing is a matter for debate, but the techniques do appear to be quite profitable if you can pull them off.
Given the nature of these tactics, we certainly understand the hesitance of retail liquidity to use such platforms. If you find any retail money in V3, you can safely presume it to be dumb money.
Weβve previously posited this was in fact the intended effect of V3. Clear out the small fish, and reserve the bulk of liquidity for VCs to try rugging each other. WEN FEI v2?
Curve TriCrypto Optimization
Meanwhile, Curveβs first V2 offering (the BTC-ETH-USDT TriCrypto pool) is proving immune to front-running, almost as if it was architected by a billionaire chad math genius or something.
This resilience holds while maintaining robust capital efficiency.
In fact, these poolsβ efficiency should theoretically grow with pool size.
Fortunately for CRV maxis, TriCrypto is growing very fast.
Presumably more traders are growing comfortable with the pool having seen it in action for a few weeks.
We reviewed a few case studies last week. The pool enables more advanced traders to employ further hypothetical strategies.
Certainly, one should always consider the benefits of βdiversifyingβ oneβs portfolio.
In addition, usage of the pool itself provides a lot of interesting insight into trends in the DeFi space.
Curveβs first v2 pool is proving a well-oiled cog in the money factory.
Did somebody say flywheel?
For more info, check our live market data atΒ https://curvemarketcap.com/Β or our subscribe to our daily newsletter atΒ https://curve.substack.com/. Nothing in our newsletter can be construed as financial advice. Author is a $CRV maximalist and holds a stake in the Tricrypto Pool.