Sept 2, 2021: The Flywheel Effect ๐ŸŽก โšก

Curve Factory โžก๏ธ Bribes โžก๏ธ Convex โžก๏ธ Chains

Watching Curveโ€™s flywheel spinning into full effect is a gorgeous sight. If you staked any time in the past, you might be sitting back and watching the show.

Consider, Curve just launched a pool factory for v1 pools, up to 34 user generated pools. Each pool generates trading fees, good for veCRV holders ๐Ÿ“ˆ๐Ÿ“ˆ๐Ÿ“ˆ

People are mostly using these for stablecoins, but you could build anything, even as outlandish as wrapped NFT pools. More practically, we see things like Fixed Forex. Itโ€™s not only gaining traction, it will also soon be getting rewards:

Twitter avatar for @thekeep3rKeep3r Network @thekeep3r
fixedforex.fi update; Following gauges activate for CRV rewards in 2 days, 3 hours; ibEUR/sEUR ibKRW/sKRW ibAUD/sAUD ibJPY/sJPY ibGBP/sGBP ibCHF/sCHF KP3R rewards will be enabled during the course of the next week as well. Image

What happens when thereโ€™s ever-more pools and ever-fewer rewards? Competition escalates. Good thing we have an efficient bribe system, especially one that accrues more value to veCRV holders ๐Ÿ“ˆ๐Ÿ“ˆ๐Ÿ“ˆ

Currently brandishing the largest wand, the $SPELL bribes are working like magic:

Ergo, whoever controls the bribes is clearly in the catbird seat.

Convex Finance is subsuming Curve. The protocol controls nearly 100MM veCRV at their disposal on over $7B worth of volume locked, all the while throwing off value to everybody in the ecosystem๐Ÿ“ˆ๐Ÿ“ˆ๐Ÿ“ˆ

Convex will basically control all voting rights on Curve via Votium release. At this point, the intense bribe wars will undoubtedly extend to Convex.

If you happen to believe Convex is stupidly underpriced in the market, your optimum strategy is probably to just shut up and grab it while itโ€™s cheap.

The effects so far are primarily just value captured on Ethereum at the moment. Yet we know DeFi is moving to other chains as the mainnet becomes absurdly overpriced.

Fortunately, Curve is hard at work expanding across multiple chains at the moment, frequently with chains directly incentivizing this expansion ๐Ÿ“ˆ๐Ÿ“ˆ๐Ÿ“ˆ

Ranging from the bootylicious Polygon, (already half a billion in Curve volume locked), to integrations announced but unlaunched (Arbitrum, Solana, Avalanche), Curve helps these chains grow their DeFi ecosystem and return value back to the flywheel ๐Ÿ“ˆ๐Ÿ“ˆ๐Ÿ“ˆ

As these chains reach maturity, imagine the additional opportunities which could be unlocked in the future ๐Ÿ“ˆ๐Ÿ“ˆ๐Ÿ“ˆ

You donโ€™t even need to understand precisely how all the gears of this machine fit together. Even if youโ€™re small brainโ€ฆ. you see a money flywheel accelerating, WYD?


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