If you want to become a DeFi expert, you MUST understand The Curve Wars.
Here it is, explained in just 7 tweets๐งต๐
Here it is, explained in just 7 tweets๐งต๐
Curve is a stableswap AMM (aka a place to swap tokens with equal or similar value. This could be stablecoins, interest bearing derivatives, etc.)
Because of this, @CurveFinance receives billions in daily volume, and thus swap fees (.04% of each swap)
Where do these fees go?
Because of this, @CurveFinance receives billions in daily volume, and thus swap fees (.04% of each swap)
Where do these fees go?
50% of fees are given to LPers, while the other 50% are given to $veCRV (vote-escrowed CRV) holders.
$veCRV can be earned by locking $CRV for 1-4 years (the longer locked, the more $veCRV earned, as seen below)
$veCRV holders receive higher LP rewards as well.
$veCRV can be earned by locking $CRV for 1-4 years (the longer locked, the more $veCRV earned, as seen below)
$veCRV holders receive higher LP rewards as well.
But thatโs not all. $veCRV holders vote on which pools receive these extra boosts.
But who wants to lock their tokens for 4 years?
Enter @ConvexFinance:
Users can supply $CRV into Convex in exchange for $cvxCRV ($veCRV on Convex), automatically receiving max $veCRV yield!
But who wants to lock their tokens for 4 years?
Enter @ConvexFinance:
Users can supply $CRV into Convex in exchange for $cvxCRV ($veCRV on Convex), automatically receiving max $veCRV yield!
Because of this, Convex controls over 50% of all $veCRV.
$cvxCRV holders also earn 10% APR in $CVX, the protocol governance token.
$CVX can be locked for $vlCVX, giving voting power on how Convex uses its $veCRV (voting on which pools to incentivize).
$cvxCRV holders also earn 10% APR in $CVX, the protocol governance token.
$CVX can be locked for $vlCVX, giving voting power on how Convex uses its $veCRV (voting on which pools to incentivize).
Because of this, projects want to accumulate as much $vlCVX as possible, in order to incentivize their own pools with more $CRV emissions. (Thus more LPers)
Projects can also bribe $vlCVX holders with $ to vote for their native pool, which is much cheaper then buying $CVX.
Projects can also bribe $vlCVX holders with $ to vote for their native pool, which is much cheaper then buying $CVX.
This drives more incentive to holding $vlCVX tokens.
Users can manually vote for pools, or delegate votes to @VotiumProtocol, who automatically choose the best bribes/maximizes rewards.
The problem is, you can receive small balances of tokens that are not worth to pay gas for!
Users can manually vote for pools, or delegate votes to @VotiumProtocol, who automatically choose the best bribes/maximizes rewards.
The problem is, you can receive small balances of tokens that are not worth to pay gas for!
Enter Llama Airforce Union (LAU):
Instead of having to claim small balances from Votium, the LAU will merge the bribe rewards into auto-compounded $cvxCRV!๐คฏ
As you can see, the Curve Wars are extremely in depth, and are always evolving! (New projects pop up every 5 minutes)
Instead of having to claim small balances from Votium, the LAU will merge the bribe rewards into auto-compounded $cvxCRV!๐คฏ
As you can see, the Curve Wars are extremely in depth, and are always evolving! (New projects pop up every 5 minutes)
As always, this Curve Wars thread by @rossboothr is a must read. Check it out!
Thank you for reading. Let me know if you want me to cover a Curve Wars project every week.
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@BarryFried1
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@BarryFried1
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