May 8, 2024: $afCVX 🍬💎

Asymmetry Finance announces hybrid $CVX Wrapper built atop CLever

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The $CLEV token bucked the sluggish market yesterday with a vigorous pump.

But what is it? How old is it? And who built it?

The story begins with an ancient civilization you've probably never heard of... a tribe of big brains too CLever by half…

During DeFi autumn, it seemed wise to build "picks and shovels" atop the few protocols that earned real yield. Aladdin DAO studied the landscape, found the best opportunities, and built fantastic tools atop the most promising.

One such tool when Convex was at its peak was CLever, which provided access to Convex yields up front.

But of course DeFi as we know it would suddenly collapse. As DeFi autumn gave way to the throes of DeFi winter, sentiment around the space turned frosty.

Gas on mainnet tells the story…

What happened to DeFi?

A lot of fake DeFi utterly collapsed. This brand of “CeDeFi” or whatever you want to call it had attracted outsized attention during the brief bull market but got accordingly erased in the collapse of Do Kwon/SBF’s empires. It wiped out a lot of institutional investors as well, who became extremely reticent about anything DeFi.

A few of the proper DeFi offerings just kept ticking. Aave still handles loans. Curve’s flywheel spun just as smoothly, even releasing some new groundbreaking infrastructure. Liquity’s groundbreaking decentralized stablecoin, kept near its peg with near no outside intervention required.

An observer wandering into the jungles of true DeFi might feel like they stumbled on an ancient lost civilization remarkably still working.

Despite the bearish sentiment, some of the most successful people in the world seem to think the puck is next heading towards this sector. CZ, on departing Binance, suggested he would use his free time to study up on DeFi.

Blackrock, whose portfolio includes the entirety of planet Earth, are making moves into DeFi. This past week, they applied for an Arbitrum STEP grant.

To give a sense of what a ghost town DeFi is, here’s what the clear-throated arrival of the world’s largest asset manager tiptoeing into L2s did to the ARB token price.

I guess it really was priced in? One of the theses of DeFi was the bet that institutions might arrive, and they might use the existing infrastructure instead of building anew. The thesis is resolving affirmatively.

A final group of smart builders taking notice of DeFi is Asymmetry Finance. In February they burst onto the scene with the successful launch of $afETH, a hybrid ETH/CVX token built for yield. Our profile:

Since then, the prices of everything DeFi collapsed yet again, which was sort of the most bearish case for the hybrid token. Yet it did little to dampen the new protocol’s momentum. Yesterday they released details on their newest hybrid token, $afCVX, built atop the CLever infrastructure.

Their launch thread provides the details of the new token, scheduled for May 14:

Here’s how it works:

• 80% into CLever, accessing the 1.5x non-liquidating fixed funding rate with stable leverage

• 20% into staked CVX, to get the revenue from Convex Finance itself

It’s the first serious attempt to launch a product on Convex since they announced tweaks to their tokenomics last year

The first, but possibly not the last to build atop CVX?

Asymmetry is billing $afCVX as the “Highest Yield, Most Liquid” version of CVX… but what’s the catch? There’s no free lunch, right? Best to understand it as a 80%-20% hybrid, accordingly inheriting the risks and rewards of the underlying.

It may be entirely liquid for small deposits, though larger deposits may not be able to access instant withdrawals.

We doubt we need to remind readers of the risks of crypto at this point… we all are intimately familiar with the fact that prices can go down and protocols can get hacked. So of course, we recommend you do your due diligence.

To this end, the team declared the new token has been audited by yAudit, though the audit for the new product has not yet been released. Until then, you can enjoy the audits from the prior product.

A lot of the beauty of Asymmetry’s product launches is the simplicity, and the team has experience selling such products to institutions.

A critique of Asymmetry’s prior release was the cap. They got a lot of momentum and demand for their $afETH, particularly tapping into the points phenomenon with the “Gem Rush.” But they set a very low cap, so we never got to see the demand ceiling.

The team confirmed this cap was not due to anything like a vulnerability, but rather they were trying to time some good news…

Speaking as somebody who’s been contemplating a holiday or hiatus since early 2022, but waited to time it for a week when everything in the $CRV ecosystem was not melting down in slo-mo, I can confirm that trying to time things alongside “bullish” news is a fool’s errand. Hence why Curve likely picked up its habit of just building and shipping with little regard for the vicissitudes of the crypto market.

If you're asking when the good news for DeFi is arriving in AD 2024, you are the yield...

The CVX community, long suffering the depletion of its strategic copium reserves, was about as bullish as the long-suffering community could muster

At any rate, we’ll chalk this announcement up as “Good News.” Best way to scoop the news is to make it yourself.

For more, check out the interview on Leviathan News, where the got into finer detail and even dropped some light alfa on TGE:

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Disclaimers! Author is long just about everything in the broader flywheel (CRV, CVX, CLEV) and an investor in Asymmetry