June 9, 2022: Ropsten Merges ππ
Plus Aladdin DAO teases airdrop, uptick in Curve trading activity
As far as technical achievements go, yesterdayβs was a biggie. Ropsten successfully merged last night with little incident.
The intensity almost resembled a scene actual boomers might liken to NASA mission control at the moon landing.
Big congrats on launching the piece-of-π© (unless POS has another meaning we donβt know about)
The actual Ethereum mainnet merge will be higher stakes, but from an execution perspective, the heaviest lifting is done. Theyβve successfully gotten to the dress rehearsal stage.
Now itβs time to review the results on Ropsten and make sure everything was smooth. The team has the data they needed β some activity to dig into around participation rate and possibly make some tweaks. Overall, the merge completed successful, so big congratulations.
Hereβs how the rest of the merge will play out:
Weβre above 90% odds in the betting markets on the Merge being completed this year. Get your staking solutions ready!
In the interest of fairness, Ethereum skeptics raised some valid criticism.
In truth, it is important to consider the bear case for assets youβre bullish on. Check the replies on this thread to check your thinking:
The FUD-sters would win out in this case, with ETH dropping on the news.
Itβs a tough skill to acquire, but truly hope this bear market teaches survivors to shrug off the price movements. Better to accept them as a riddle that defies answer. Their infinite irrationality can drive you mad.
Focus on the tech, and all you experience is the pure joy of perseverance and triumph from yesterdayβs big announcements. Nobody cut any corners to get here, like weβve seen from rival blockchains with habits of self-destructing. ETH devs did this the hard way, and their work will soon pay off.
Fewer people watched than the moon landing, but Iβll certainly always remember where I was. Mostly cause I seldom leave the same 1 meter radius, but the sentiment stands nonetheless.
Today being the final free newsletter of the week, a few random notes from around the Curve ecosystem.
Concentrator Airdrop
Aladdin DAOβs Concentrator is announcing an innovation on the airdrop in the form of an Initial Farm Offering (IFO). As a means to provide a fair token launch, they are creating farming vaults to distribute $veCTR, representing a piece of future Concentrator revenues.
The farming is set to launch soon and will run until the entire supply is exhausted. Is DeFi Summer back?
Weβll likely have a more in-depth review as the date approaches.
Trading Fees are Back
Curve is doing great volume in the bera. Whatβs going on?
Well, for starters, it depends who you trust. If you trust Curve and the trading fees they subsequently deposit into your pockets, Curve is doing great.
If you trust DexGuru, then Curve volume is a fraction of what it claims.
Weβll trust Curveβs numbers for this article because the fees appearing in our pockets appear to align more with Curveβs numbers than Dex Guruβs numbers. But we donβt believe much in βobjective reality,β so youβre welcome to select the reality you prefer.
For our narrative, Curve is often seeing half billion dollar days lately.
A healthy portion of these trading fees are coming from v2 pools.
TriCrypto
Curveβs v2 pools are proving a win-win-win for Curve, users and protocols every time crypto is volatile (which is often)!
Curveβs v2 pools are great for consumers because they never stop trading. The recent volatility in which Bitcoin has yo-yoed aggressively between $29K to $31K has meant more trading fees for LPs.
TriCrypto and other v2 pools are underrated destinations for liquidity providers. They can be confusing because your yields are the function of 3 moving parts. A recent Curve Brownie tutorial covers methods for calculating these data historically.
Trading Activity: As the pool gets traded (often because arb traders are rebalancing shifts in asset prices), the value of your LP token ticks upwards over the long run (maybe 1-2% per year).
Rewards: While trading activity might push your price up maybe a percentage point per year, you can also get $CRV rewards for sitting in the pool. TriCrypto even in bear is getting you about 8%
Impermanent Loss: The final moving part is price fluctuations β if the above two earn you 10% yield in a year and the price crashes 10% in the time, you only break even.
The latter is toughest, though certainly not unique. Traders may try to smooth this out by dollar cost averaging into and out of the pool (not financial advice). One strategy if youβre optimizing to max out BTC or ETH:
When BTC/ETH prices drop: withdraw cheap BTC/ETH from the pool and buying in with Tether.
When BTC/ETH rise: take out Tether at a discount.
Or if you are trying to maximize USD, your strategy would be similar.
When BTC/ETH prices drop, withdraw BTC/ETH to give you dry powder
When BTC/ETH prices shoot up, BTC/ETH and withdraw USDT.
For my sake, Iβm neither a trader nor particularly good at timing the market. I sometimes buy into the pool using Tether, but seldom withdraw β partly because the raw ETH/BTC Iβd withdraw donβt have yield farming options as high as the ~8% Iβd get just sitting in TriCrypto.
Of course, you can also try single-sided staking options like Bancor to remove risks of impermanent loss. With money tight, I think safe yield farming is more important than ever and urge people to consider all options.
Synthetix
Some of the recent Curve action just comes from more integrations. Curve tends to be extraordinarily efficient when compared with rival AMMs, but people only find this efficiency when aggregators build the pipelines properly.
Recently 1inch integrated with Synthetix Atomic Swaps, leading to additional traffic through Curveβs Synthetix pools:
Curve is betting that they need only build the most efficient trading platform, and eventually aggregators will opt to lay the pipes through Curve. If aggregators indeed have a business interest in presenting users with the cheapest option, then Curve trading fees are likely to trend upwards in the long term.
tBTC
Notable spikes in activity on the tBTC pool also appeared out of the blue.
Itβs possible the activity is due to the impending launch of tBTC v2.
It may also be lingering contagion from the Luna fallout. It feels like it was forever ago, but it was scarcely a month since the collapse. TradFi firms may take more time to unwind, so we may see continuing aftershocks even as the rest of DeFi has seemingly moved on.
3pool
USDT FUD is always in season, but the gradual repegging of 3pool following its A parameter change isnβt grabbing equivalent attention.
Itβs still nice to see the pool creeping its way back towards balance as expected. Whoever snapped up the arbitrage opportunity doing a good job finding free money in a tight market.
Disclaimers! Author has a position in assets mentioned including TriCrypto, $aCRV, $BNT
Would you kindly share the source of the totally awesome animation in the background of this video? I've admired it in past videos, and I must know. :-|