May 27, 2022: Monsieur $BTRFLY 🫳🦋
0xSami answers all things ████, Hidden Hand, "Wen Pirex" and alfa
████ were among the first to appreciate the value of flywheel assets and began scooping up $CRV and $CVX early. They control an enviable 10.7% stake of the DAO-owned $CVX, the fourth largest stash overall.
This productive stash of assets is earning them nearly 7 figures in monthly revenue according to their homepage, with a live breakdown of assets accessible on Dune Analytics. While lesser degens would be content to sit back and enjoy the fruits of their early investment, the team has been building and shipping products at an impressive rate.
In Q1 of this year Yuga and I wrote up separate explainers covering the protocol.
Already the team has made enough progress to render these anachronistic. The team’s lofty ambitions are outstripped only by their relentless execution.
The team already launched the Hidden Hand marketplace for veToken bribes, to the delight of users seeking cash flow amidst the bera.
They’ve also teased Pirex, a service with a bespoke splash page promising to tokenize future vlCVX yield and/or token holder rights and exchange them on a free and open market. The KingMaker Podcast chatted with @0xSami_ and @ppmoon69 last month to tease Pirex and much more.
Recent threads by @BarryFried1 and @SalomanCrypto covers more recent updates on the cartel’s activity in outstanding detail.
However, the only way to keep up with the cartel is straight from the family themselves. We cornered 0xSami and chatted rlBTRFLY, Hidden Hand, some firm answers on “Wen Pirex”, and beg for more alfa.
The interview is paywalled until Tuesday, when it is released to the public at large. Given the speed of $BTRFLY’s execution, we have to imagine it will already be entirely out of date by the end of the holiday weekend.
CMC
Ser 0xSami, without doxxing yourself too much, tell us a bit about yourself
0xSami
Actually doxxed (real name is Sami haha), but of course, been experimenting in the crypto space for the past few years. Originally doing econ here in Toronto @ Schulich, and went on to study blockchain at one of the specialized programs in my uni. From there managed to meet a few people who helped with the curriculum and got two intern gigs, one at a crypto fund and another at a layer-1, mostly focused on emerging DeFi trends. That evolved into some more analyst stuff like Messari hub etc. and went on to launch New Order DAO with some friends, which is an incubator DAO substituting venture capital for sweat equity, and from there we came up with the idea for Redacted and here we are today :D
I guess worth noting that I didn’t finish the Econ stuff at school but I hope one day I can get around to finishing it, haha
CMC
College dropout is like a free square on the startup bingo card anyway. What was the kernel of the first idea for Redacted? Did you just want to acquire assets through Olympus bonds and see where they went? Or did you foresee the newer products you've been launching?
0xSami
Right, so I guess being super down the DeFi rabbit hole, a thesis was being built around the value of governance, specifically around conviction locking, emission directing and the value that it has around bootstrapping new projects with respect to pool 2 emissions. The goal was always to build novel governance infrastructure around these complex DeFi ecosystems such as Hidden Hand and Pirex, however in order for us to check off the several boxes of bootstrapping a protocol (building liquidity, treasury, fair distribution etc.) we simply chose to go with the bonding approach rather then the farming one as we found there was more value in owning these assets within the treasury rather then just farming them. Now that the bootstrapping phase is coming to and end, bonding and rebases are getting phased out of the protocol for a less aggressive module which allows the project to get the most out of the underlying treasury as well as move on to new revenue-generating markets.
CMC
You're currently printing ~$1MM per month revenue according to your homepage -- what's the breakdown of that. Is that mostly from farming? Or the newer revenue generating projects?
0xSami
Right. I think that number is slightly lower now considering drawdowns in treasury assets. At the moment that is coming from a range of strategies designed by the DAO such as $CVX lockups , $TOKE reactor hopping, $CRV liquid wrapper LPing, and stuff along those lines. Pirex, one of the new revenue generators is launching this month and Hidden Hand which launched earlier this month is growing really fast currently doing around $1m in volume since launch a few weeks back. With the launch of rlBTRFLY, all these revenue streams will be able to be recognized by the token holders (as the DAO vote decided) instead of being held in the treasury, which some would consider a flaw with the current v1 model.
CMC
It seems like a perfect time to launch Hidden Hand with so many veTokens. Which protocols have been working best so far, and which protocols do you think might set up a marketplace in the future?
0xSami
Hidden Hand has been lots of fun so far, right now the two leaders have definitely been Tokemak with their core events and Balancer with their new veBPT module. Both of which have pulled in hundred of thousands of volume respectively. In terms of what’s next for Hidden Hand we are trying to think pretty out of the box, yes of course we will do the obvious ones like DeFi projects with veTOKENs and the multi chain DeFi scene. However, beyond that we’ve started exploring NFT-based bribes with our friends at FloorDAO and some cool private mempool coordination bribes using Hidden Hand, as well as a $CRV-bribe aggregator which looks across vlCVX, veCRV, sdCRV, glBTRFLY, pxCVX etc. and gets bribers the most capital efficient bribe to get the higher bang per buck. We hope we can get all of this out in Q3. :)
CMC
That's quite ambitious, hope the devs don't revolt! Does this mean you'll have to push the Pirex launch to the backburner?
0xSami
When is this coming out haha, Pirex comes out in a few days :D
Might be live by the time this comes out!
CMC
I know the community interest around Pirex is intense -- any interesting updates beyond what's been reported from the teaser on the current site?
0xSami
Yes! Our very own smart contract king KP did a written interview at the Redacted newsletter talking about Pirex and went into detail on the launch phases, mechanics, and more
CMC
Redacted has collected a lot of flywheel assets, ie $CRV, $CVX. It seems like they’re not yet figuring into the design of these new tools. Do you have plans to utilize them beyond farming? Correct me if I'm wrong... but Pirex involves users locking their own CVX and getting a better return on it through leverage. It seems like this happens independent of the stash of CVX has built up? So is Redacted's stash just earning yield for the treasury? Or to earn rewards for BTRFLY-ETH pool?
0xSami
Well, we will be moving the $CVX that we own into bootstrapping Pirex, pointing rewards towards a pxCVX gauge, minting supply , balancing LP, etc. This will be the new home for $CVX, and as the Pirex product offering expands into other assets like veFXS and accTOKE , we will move treasury reserves into their relevant Pirex markets, in terms of sourcing the yield for them we will leverage other tools in our product suite like Hidden Hand to develop markets around these tokens, creating an internal flywheel of sorts, I think it comes back to the importance of the bootstrapping phase and why aggressively accumulating these assets were so important because as the Redacted protocol grows we needed these assets to to see thinks like Pirex, Dinero, and Hidden Hand into existence
It is worth noting that if a user opts for owning the governance rights for the locked up CVX through the wrapper they can still do that, we will not use any of the CVX voting power in Pirex for any selfish purposes, all aspects of the locked up CVX are in the hands of the users
CMC
Very good ser. Any particular alfa you'd like to drop? 👀
0xSami
Haha, $dinero - the Redacted stablecoin coming soon™️
CMC
¡Me gusta!