As the bear market’s raged, Convex has remained a cozy place to keep earning consistent yield. With the fast mooning $LUNA looking to invest heavier into the flywheel, things could get comfier for Convex.
Convex
Since Convex launched 10 months ago, we hadn’t really experienced any occasions where the price tumbled consistently throughout a lockup window until recently. When paper hands lock and then watch their asset dump, they get antsy. As bears roared, we’d had to endure constant FUD that paper hands would unlock and dump, perpetuating a death spiral for $CVX.
Thanks to a fortuitously timed bug, we instead got to rip the band-aid off in a single great relockening. It wasn’t so bad. Convex chads kept the faith throughout.
It’s sometimes stunning to think just how little Convex supply is available. You don’t have enough $CVX, and neither do other exchanges.
With nearly three quarters of $CVX locked, my math gets us only about 20-25MM $CVX floating around in the wild. Counting 34 market listings on Coingecko, that works out to a max of 500K available $CVX per exchange if it was spread evently, or just around $10MM in liquidity apiece. More markets still listing or yet to list.
The most active market for CVX is Curve itself. The CVXETH v2 pool, with a whopping 3.5MM of the supply, has all but rendered the CEX market obsolescent and captured the plurality of trading activity.
Votium bribe round 14 will be playing out over the weekend, and it could be worth watching, especially given recent moves by Terra.
Terra
The Terra ecosystem meanwhile continues to moon, with $LUNA now 7th largest on Coingecko. The protocol has secured about 6 months of runway from investors, with much of this earmarked towards lubricating the flywheel.
In their proposal they specifically cite the flywheel has “proven to be extremely effective in bolstering liquidity.”
Terra’s ridiculous growth may have to slow down at some point, but the stars are aligning at the moment. Particularly bullish is that Korea is so thoroughly embracing cryptocurrency.
It’s exiting news for Korea. With China squeezing the life out of Hong Kong, Korea is perfectly poised to become the fintech epicenter of the east, or possibly the world. We’re excited to see what direction 윤석열 steers his country, and if they plan to welcome tech-savvy ex-pats fleeing flailing former superpowers.
Terra is rapidly becoming the too-big-to-fail ponzu in a country that loves its mega-conglomerates. We’d therefore expect the Terra rise has some gas left. Still, skeptics continue to assume its collapse is imminent. This played out in a highly public fashion earlier in the week, in the form of a million dollar “bet” (option) on the price of LUNA.
Admittedly, the most bearish part of the escapade is that in 2022, nobody could figure out the mechanics of building a smart contract to resolve the bet? Still baffled by this.
Odds and Ends
They tryna say it’s a bear market, but the amount of raw activity suggests otherwise. Here’s some other quick hits from around the DeFi world we couldn’t fit in this week (tomorrow’s article for paid subs only).
RARI
As money legos continue to stack up, a new Fuse pool this past week gives users the coveted capability of borrowing against their position.
Suddenly, flywheel leverage is becoming a popular market…
LendFlare
Legos are great, but you can die if you step on them barefoot. To help alleviate the risk, LendFlare is building products for leverage with liquidation immunity.
For more details, check this article:
The lending market continues to become a hotly contested new front in the Curve Wars. Amidst these products, don’t forget about Curvance!
Silo
Silo, which jumped into the Curve Wars last week, is up for a gauge vote for their SILO/FRAX pool. On Convex there’s 1MM CVX voting 100% yes, but still short of the 7MM needed for quorum. Vote!
Concentrator
Concentrator, which we reviewed in greater depth last week, has doubled its TVL in the past week.
The promise to earn yield on rewards by staking cvxCRV behind the scenes is promising to reinforce the cvxCRV/CRV peg, though Concentrator will need some more volume before we see more tangible impact on the 60MM in the factory pool.
Fortunately it appears more is on the way.
+ More!
Everybody shipped this past week! We welcome AAVE v3
Alchemix v2
cvxFXS Pounder
A ragequit option for Wonderland.
@nagakingg released a great overview of Curve v2 pools
More Curve threads
Plus big yes votes for our CRVFunder proposal. Thank you to all who have voted!
Let’s go…!!!