Sept. 16, 2022: Crypto Metapools 💱🐘
Plus $sdCRV passes 20MM, Fallout from The Merge
Crypto Metapools
Crypto metapools is a fun one….
Vanilla metapools gave Curve v1 the deep composability that made it unquestionably the most viable source for stablecoin liquidity. Not just efficient trading between $USDC, $USDT, and $DAI, but the capability for any stablecoin to create a pairing and get deep liquidity and utility.
Now, we’re begin to see whispers of similar v2 composability. Here it’s being used to create a pool with six assets:
Any crypto token paired with TriCrypto gets deep, indestructible liquidity, and efficient 24/7 trading pairs with the best assets in crypto: dollarcoins, BTC, and ETH.
Is the pool getting too crowded?
No particular engineering effort was needed to launch this, as this crypto-metapool is using the same source code that powers all v2 pools. It just happens to contain the TriCrypto LP token as one of its two assets.
The frontend router gets the privilege of processing the logic around wrapping/unwrapping to complete the necessary routing. Nothing would theoretically prevent this new CRV-Tricrypto LP token from sitting in a metapool, which could get folder into yet another metapool, et al… if you wanted to create a “turtles all the way down” sort of wrapping.
The potential blocker to all this may be gas usage — each sequence of transactions compounds gas usage. Few would care on the low-cost Polygon, which makes it a great testing ground. In fact, even on mainnet it’s not a big deal given current gas fees and Ethereum prices.
Though it feels like a lifetime ago, last year gas prices got so severe FUD-sters were declaring Ethereum dead because it was too heavily utilized. For example, a transaction using a Curve crypto pool may cost between 200 - 300K gas. Back when ETH was $5,000 and gas fees above 100 gwei, this could total something like $200 per transaction. Whale stuff…
Now, Ethereum is cheap and gas is low. The Merge went so flawlessly, it feels as if people see the current state of the blockchain as having reached a state of perfection. Nobody dares to transact on L1, lest they spoil this masterpiece.
Problem is, the lull in Ethereum usage has dropped gas fees so low that ETH is now inflationary. By corollary, ETH is now ultra unsound money?
Trade last fall’s 100+ gwei for our current 10 gwei base fee, and drop the price of ETH from $5000 to $1500, and suddenly the same transaction that would have cost $200 now costs just $5.
Perhaps we need to deploy some crypto metapools across L1 just to drive up gas fees and make Ethereum deflationary again…
Wrapped CRV Wars
Congrats to Stake DAO at hitting 20MM locked $CRV!
This kicks off another flippening watch. While Convex’s $cvxCRV is still in a distant first with 10x the TVL away, Yearn’s $yveCRV is stalled out in second 26MM. Stake DAO is threatening to flip Yearn to earn the silver medal.
Stake DAO may fall behind Yearn in terms of TVL, but their wrapped $CRV token maintains a far more enviable peg.
Yearn is seeing its peg recover though. A recently passed snapshot vote out of Abracadabra to lock their substantial $CRV holdings as $yveCRV may help push this peg upwards.
Meanwhile, the $sdCRV peg has no such troubles. How is it so strong?
Could this peg help an ascendant $sdCRV to take down $cvxCRV? There’s about 500MM of unlocked $CRV up for grabs. In order for Stake DAO to threaten Convex’s lead, it would need to lock half this amount. It’s a tough feat, but with the price of $CRV at such a discount, could you definitively rule it out?
Aftermath of The Merge
Let’s check in on the past 24 hours in the greatest achievement in cryptocurrency since Satoshi’s white paper. Since The Merge:
Ethereum price nukes
Gensl0000r warns it’s now a sec00000rity
Bitcoiners like it!
The Merge gave us one brief moment where were all unbothered, moisturized, happy, focused, and flourishing. Is it over already?