May 20, 2022: Grin and Bear It 😁🐻
Bearshipping with $CRV, $CVX, $SDT, $magicCRV, $mkrCRV, $PAL and many more
Once upon a time haters were in disbelief that the Curve ecosystem had enough action to support a daily newsletter.
As it turns out, we’d need a 24-hour Curve News Network (CrvNN?) to keep up with all the activity. Here’s the dump of everything we wanted to write about but couldn’t squeeze in this past week. Please flood the comments with anything missing!
CONVEX
Happy birthday to Convex, which had a stunningly successful first year.
As new users jump into and out of crypto, some phenomena serve as generational markets. Convex having such a short window of supply emissions, owning a modestly sized $CVX stash could become something of a POAP for users who survived DeFi Winter 2021-2022. We’re past 90% and screaming towards 100% emitted.
The most recent Votium round was predictably hampered by the bear market, but what’s exciting to us is seeing the flywheel is continuing to spin efficiently despite protocols shifting into goblin mode. We’re back to token bribes being efficient.
FEES
If you’re not aware why the @CurveFinance Twitter account has a tendency to get giddy as the rest of DeFi burns, hopefully you paid some attention to the results of last week’s record fees. The UST collapse fees started flowing back to flywheelers in the form of good, old-fashioned dollarcoins.
There’s a beautiful symmetry about flywheelers tending to get extra dollarcoins at a time when the USD has run up in value relative to cryptocurrencies. Use your newfound treasure wisely!
Also take note that fees across the entire Curve ecosystem have been quite nice lately, partly thanks to paper hands getting flushed out of the ecosystem. With Terra bleeding out, we’re also seeing their $CRV emissions redirected among surviving combatants. If you need a place to stay comfy in a bear market, worth reviewing the current landscape of Curve yields.
Most notably, even though the wild turbulence in cryptocurrency has calmed somewhat this week, Curve trading fees remain strong. At the moment we’re seeing half billion dollar days when volatility is low, with spikes into multiple billions when volatility peaks. Keep an eye on how these numbers do if the overall DeFi market cap starts to spike.
STAKE DAO
Too many protocols are scared to ship during bear markets, which is unambiguously the best time to ship. Way more oxygen in the room. This is the time when fortunes get made.
Therefore we’re paying a lot of attention to the big moves Stake DAO has made this past week. The Stake DAO Liquid Lockers were the subject of a contentious vote in late April, and now Stake DAO is enjoying the fruits of their success in governance. Angle Protocol has already flexed these lockers, to the joy of some LPs.
The Stake DAO team is one of the handful of teams with white list capability, so it’s great to see them putting it to use.
TOKENOMICS
With the bear market roaring, if you don’t yet grok how a 4 year lock helps smooth out noisy short-term fluctuations, I don’t have time to explain it to you. Maybe @TokenBrice can help you.
A health metric to keep an eye on for Curve would be to see if CRV is still getting locked in a bear market. As it turns out, this is growing!
The small (but growing) handful of protocols whitelisted to lock $CRV are building a cottage industry atop the Curve Wars.
Abracadabra’s Magic CRV goes live this week, a wonderful success story given they kicked off 2022 with what could have been an extinction-level event for less resilient protocols.
Also live this week is MakerDAO’s mkrCRV, formed initially as a counterpunch against a 4pool that would never come to be.
Altogether, the Wrapped CRV Wars are showing signs of becoming competitive as cvxCRV went on a slight discount and yveCRV is rapidly approaching a repeg.
Keep an eye on the wrapped version of Convex as well, and make sure you’re well versed on the risk factors of wrapped tokens.
COINBASE
As Coinbase has fallen out of TradFi investor’s graces, observers are not giving them their dues for shipping great products into a bear market.
A sense of perspective may be helpful here. Convex’s birthday announcement boasted about 30K some users. Coinbase has over 2500x this at 80MM, often times the sort of users (like my mother) who may never be able to figure out Metamask. When the bull market next roars, you can imagine they’ll dust off their Coinbase account and wade into services like the Coinbase’s NFT or dApps platform.
When hopium is scarce, also enjoy the fact Coinbase featured Curve in its launch.
PALADIN
Paladin is worth keeping track of as the question of governance becomes a hot button issue. This past week the team launched Quest, an all-encompassing veCRV gauge solution and boost marketplace.
The Quest product is described as the “second face” of their Warden project.
Great tools worth keeping on your radar!
LEGOS
It’s always nice to see new products launching atop Curve.
As much as we wish we could feature everything, it’s unfortunately not always possible to get full attention on everything. However I will give some advice on getting on our radar:
Don’t DM me and expect a timely reply. My “Message Requests” is a sewer and I only tend to dip in there when I get pointed there externally.
Public comments about your product are a much better way to get attention — these have a tendency to get bubbled up by the community, while helping to benefit the ecosystem.
Airdrop announcements will always get people excited.
Case in point…
VELODROME
So we still haven’t had a chance to research Velodrome Finance, so we can’t offer anything like an endorsement. But hey, they get their own section in this newsletter cause they’re playing a great hype game!
You have flywheelers’ curiosity, next comes our attention!
ALADDIN DAO
Among other great services being launched by Aladdin DAO, their ability to engage the community has earned Aladdin DAO a lot of goodwill. Check out the most recent KingMaker Podcast with @cryptocrouger.
CURVE WARS
Several combatants around the Curve Wars have hinted at their strategies for their plans around $CRV/$CVX, and all of it suggests the battles will intensify.
Stargate Finance is planning to capture STG-USDC liquidity for farming.
OHM is back? Or OHM never left? Either way, the team has timed a bearish market perfectly to ship their way back to success.
Most notably for the Curve community, they’ve always have a healthy chunk of CVX. Perhaps they’re putting it to use on their v2 pool?
DOPEX
In a lengthy thread on the Dopex ecosystem, they detailed their CVX plans.
JPEG’D
JPEG’d has also been making big acquisitions of CVX while the price has been in the gutter.
TOOLING
This great slippage simulator by @0xGeekRunner is a must bookmark tool to add to your collection.
Also, Brownie chads should upgrade to allow new methods to track events.
GOVERNANCE
Curve governance remains busy as ever. A presumably uncontroversial vote to remove UST gauges is up.
Plus a more interesting vote to tweak the A parameter again for 3pool. With tasty arbs available, the adjustment will make this easier to redeem.
If you don’t have time to participate in governance, consider delegating your $vlCVX to the Gauge Risk multisig. They do the dirty work of reviewing which gauges are worth your vote and which are worth a pass.
PRICE
Finally, the only bad news for Curve happens to be the least interesting subject, which is the Curve price, which took a plunge on some whale moves.
I find the subject of cryptocurrency pricing thoroughly uninteresting. But I can’t deny it’s the hot topic.
I don’t care much about the speculative value of tokens for a couple reasons. Notably:
Cryptocurrency pricing is wildly irrational
My activity is unidirectionally fiat → tokens
When I see you complaining about prices, it simply looks to me like you want to drive the wrong way on a one-way street. I legitimately stress far more in a bull market, since high prices make it tougher to buy. With sale prices, the only friction is the paradox of choice.
If you’re buying crypto with the intent of cashing back to fiat in the short time, I admit I can’t comprehend your mindset. I don’t have much common cause with day traders and worry they’re NGMI. Or if you’re the type that needs to sell crypto to pay the bills, you probably shouldn’t be speculating on crypto in the first place.
Anyhow, pretty much every active protocol has a valid claim to trading well below their fundamentals at the moment. It’s frankly surreal how clownishly low these prices can go.
The crypto market tends to get corrected in the long run thanks to its massive swings between stupidly low prices and stupidly high prices. It’s a somewhat efficient sorting mechanism… rather than dive into the tokenomics of 5 kajillion doggy coins, just push prices back and forth between wild extremes and see what shakes out.
Given macro trends, some observers suggest the market will keep dumping from here. This will likely crack a number of protocols under the pressure, like we saw with Terra. So many protocols build their tokenomics presuming a rational market, which is probably sounder in theory than in practice. At current prices, we’re surprised more protocols aren’t buying up struggling protocols and instantly pocketing a gain based on treasury value.
With so many people expecting further drops, it feels unsurprising bulls are sitting on the sidelines waiting for better prices. Why buy today if you think the price will drop even further?
Curve for its sake feels reasonably bear-proof. Curve has now lived out several bear cycles and consistently seen its fundamentals improve during the pain. It’s the sort of anti-fragility that makes it a good candidate to survive the bear market and live to the next bull period.
Of course, take this with a pound of salt, because everything I say is…
Disclaimers! Author has exposure to assets mentioned including flywheel assets including $aCRV, $DPX, $JPG, and $OHM