June 7, 2023: Raising the Stakes 🐘🃏
Stake DAO passes 40MM locked $CRV
“In peace prepare for war, in war prepare for peace”
—Sun Tzu, on the Curve Wars
The way the history books tell it, the First Curve Wars ended in summer of 2022 as Convex Finance approached 50% of all veCRV. But what if this was all just prelude?
At that time though, something interesting happened. With the bear market starting to roar, veCRV locking lost steam. For the first time in Curve’s history, the amount of veCRV locked as a percentage of overall supply stopped increasing regularly increasing and began a decline.
It’s only in the past month this trend has shown any signs of leveling off and possibly reversing, which only manifests as a very slight tick upwards in the otherwise steady veCRV lock rate.
Zoom into the past month or so where veCRV has hinted at ticking upwards, and there’s only one clear insurgent: Stake DAO’s $sdCRV has overwhelmingly been the recent target of major $CRV locks.
It’s been a remarkable showing from the Stake DAO team, which can boast 50% growth over two months, resulting in 40MM in locks.
As you can clearly see by the step functions on the above chart, this is not small retail locks. This is major buyers coming in size. The major purchaser of note in this case is Reserve Protocol, which is taking advantage of the market downturn with size.
Suddenly… then all at once. The seeds for Stake DAO’s recent run were sown with the partnership between Aladdin DAO’s Concentrator and Stake DAO. The teams attempted to build a $CRV wrapper with strong peg and superlative yields. This thread by Chago0x describes it in detail:
The team is not just focused on Curve, but has also accumulated a healthy chunk of governance across a variety of platforms.
Stake DAO has been sowing heavily throughout the bear market, and now appears to be reaping.
Vote Market
It’s not merely the $sdCRV locker that has been driving Stake DAO growth. The Stake DAO Votemarket aggregator has become utterly dominant at capturing the veCRV share of the birb market.
The veCRV birb market remains just under half the size of the dominant vlCVX market, which has also continued steadily apace despite the lackluster DeFi markets.
However, with the $CRV wars still active, plenty of veCRV continues to seek yields. From the outstanding market updates by Hubirb, the real yield calculation for this has been holding steady at 17%:
The Curve Wars and their underlying vote markets remain actively disputed territory. This month we saw the launch of Paladin Warlord, which has the potential to again reshape the entire battlefield.
As summarized by Hubirb:
In the past five days we’ve already seen nearly 7K CVX and 40K AURA locked to back 27K WAR, so it appears the product is off to a successful launch.
One day, we’ll sip the finest nectars from the skulls of slain bears as we share tales of heroic exploits from the fiercest skirmishes of the Curve Wars. For now, though, we press onwards to battle!