DeFi is made of many technical features.
One of the most interesting and potentially demand-driving is a mechanism called “bribes”.
A breakdown of crypto bribes, why they can create a buzz on $CRV + why this can become a great opportunity.
1/22👇🧵
One of the most interesting and potentially demand-driving is a mechanism called “bribes”.
A breakdown of crypto bribes, why they can create a buzz on $CRV + why this can become a great opportunity.
1/22👇🧵
1.
Bribes..what a particular thing.
I’m sure that hearing about this will force you to think about dark and illegal activities, right?
The theory behind bribes is right: give something to me and I will do something for you.
The difference is that it's all crystal clear.
Bribes..what a particular thing.
I’m sure that hearing about this will force you to think about dark and illegal activities, right?
The theory behind bribes is right: give something to me and I will do something for you.
The difference is that it's all crystal clear.
2.
▫️The war.
The concept of crypto bribes is mainly linked to the Curve wars.
DeFi protocols fight to get a share of the huge Curve’s liquidity by accumulating $veCRV, the governance token of Curve, influencing the number of rewards they earn from the pools, just like a boost.
▫️The war.
The concept of crypto bribes is mainly linked to the Curve wars.
DeFi protocols fight to get a share of the huge Curve’s liquidity by accumulating $veCRV, the governance token of Curve, influencing the number of rewards they earn from the pools, just like a boost.
3.
Protocols like $CVX $FRAX and $LDO for example, are battling each others to obtain this share of liquidity and to do so, they have fined-tune the bribes mechanism.
They thus reward users for earning votes.
“Votes? Wait mate, what are you talking about?”
Let’s take a look.
Protocols like $CVX $FRAX and $LDO for example, are battling each others to obtain this share of liquidity and to do so, they have fined-tune the bribes mechanism.
They thus reward users for earning votes.
“Votes? Wait mate, what are you talking about?”
Let’s take a look.
4.
I’ll take @ConvexFi as an example.
The governance token of Convex is $CVX, which you can lock in their protocol for 16 weeks + 4 days to earn platform fees, a 3.61% vAPR and voting rights.
$vICVX is the voting token that can also boost the rewards you earn (vAPR).
I’ll take @ConvexFi as an example.
The governance token of Convex is $CVX, which you can lock in their protocol for 16 weeks + 4 days to earn platform fees, a 3.61% vAPR and voting rights.
$vICVX is the voting token that can also boost the rewards you earn (vAPR).
5.
$vICVX and votes in general got also weight in terms of dollars, they're not worthless.
Remember that i said that DeFi protocols reward users for votes?
The equation is simple:
The more votes they earn, the more % in liquidity they will be able to earn.
$vICVX and votes in general got also weight in terms of dollars, they're not worthless.
Remember that i said that DeFi protocols reward users for votes?
The equation is simple:
The more votes they earn, the more % in liquidity they will be able to earn.
6.
If you scroll down on Convex you'll find the “Go to vote page” button where you can choose your preferences..but how can you check where you can earn rewards by voting?
@VotiumProtocol is the correct tool to use.
If you scroll down on Convex you'll find the “Go to vote page” button where you can choose your preferences..but how can you check where you can earn rewards by voting?
@VotiumProtocol is the correct tool to use.
7.
On Votium, you can delegate your votes where the the algorithm will distribute them to obtain the maximum reward possibilities.
If you select a pool, you'll receive a part of the incentive when the voting period will end.
On Votium, you can delegate your votes where the the algorithm will distribute them to obtain the maximum reward possibilities.
If you select a pool, you'll receive a part of the incentive when the voting period will end.
8.
Voting is extremely simple:
• Click on “Vote on a snapshot”
• Select the pool you want.
• Choose the % allocation of your votes (1-100)
• Click on vote + approve. (no gas fees costs)
“Ok bro, everything cool but..how much can I earn?
Voting is extremely simple:
• Click on “Vote on a snapshot”
• Select the pool you want.
• Choose the % allocation of your votes (1-100)
• Click on vote + approve. (no gas fees costs)
“Ok bro, everything cool but..how much can I earn?
9.
Here comes the turn of an essential dapp:
Llama Airforce.
This dashboard allows you to check:
• Rewards: the current total rewards offered by the protocols.
• All pools: the value of your votes.
• Personal rewards: how much you’re gaining.
llama.airforce
Here comes the turn of an essential dapp:
Llama Airforce.
This dashboard allows you to check:
• Rewards: the current total rewards offered by the protocols.
• All pools: the value of your votes.
• Personal rewards: how much you’re gaining.
llama.airforce
10.
Of course you can split the votes into different pools or delegate your votes to Votium, which will do all the work for you splitting them into different allocations.
The choice is yours on what you decide to do with votes.
Of course you can split the votes into different pools or delegate your votes to Votium, which will do all the work for you splitting them into different allocations.
The choice is yours on what you decide to do with votes.
11.
▫️The demand formula.
Curve is one of the leaders in the DeFi space, a pioneer in this sense.
There’s a big interest in $CRV both from DeFi protocols and investors, especially because the supply is capped at 3.3 billion, becoming very attractive in the long term.
▫️The demand formula.
Curve is one of the leaders in the DeFi space, a pioneer in this sense.
There’s a big interest in $CRV both from DeFi protocols and investors, especially because the supply is capped at 3.3 billion, becoming very attractive in the long term.
12.
With a fixed supply the competition can become ferocious translating into the following equation:
• Get your hands-on $CRV 👇
• Lock it up for $veCRV 👇
• Vote to distribute $CRV into pools 👇
• Earn more $CRV 👇
• Repeat the process 🔁
With a fixed supply the competition can become ferocious translating into the following equation:
• Get your hands-on $CRV 👇
• Lock it up for $veCRV 👇
• Vote to distribute $CRV into pools 👇
• Earn more $CRV 👇
• Repeat the process 🔁
13.
▫️Democratization?
Convex has pooled all $CRV and $veCRV through attractive incentives and put it back to work, having the ability to insanely boost all rewards for each Convex user.
This can create some sort of a “flywheel” increasing the control of holders on Curve.
▫️Democratization?
Convex has pooled all $CRV and $veCRV through attractive incentives and put it back to work, having the ability to insanely boost all rewards for each Convex user.
This can create some sort of a “flywheel” increasing the control of holders on Curve.
14.
If you stand for the “democratization” of DeFi, this situation surely makes you skeptical because the more governance token an entity has, the more power and potential rewards it can gain.
This has been one of the most discussed and controversial topics.
If you stand for the “democratization” of DeFi, this situation surely makes you skeptical because the more governance token an entity has, the more power and potential rewards it can gain.
This has been one of the most discussed and controversial topics.
15.
▫️Incentives drive demand.
As said, protocols can increase liquidity while users/speculators can obtain a reward.
That’s why the interest in this mechanism has grown and will probably grow even more over time.
Everyone profits from the situation.
▫️Incentives drive demand.
As said, protocols can increase liquidity while users/speculators can obtain a reward.
That’s why the interest in this mechanism has grown and will probably grow even more over time.
Everyone profits from the situation.
16.
▫️Considerations.
Besides the “blue chip” of DeFi status, Curve is seeing a great increase in volume activity + TVL.
What if bribes are part of these numbers?
What if they can inject the bribes tokens narrative?
▫️Considerations.
Besides the “blue chip” of DeFi status, Curve is seeing a great increase in volume activity + TVL.
What if bribes are part of these numbers?
What if they can inject the bribes tokens narrative?
17.
Due to this TVL rise, $veCRV rewards could be massive, and by reflex, many tokens involved in bribes could see a sharp increase in the future.
There are many hidden protocols that are working on bribes mechanism, most of them undervalued.
Due to this TVL rise, $veCRV rewards could be massive, and by reflex, many tokens involved in bribes could see a sharp increase in the future.
There are many hidden protocols that are working on bribes mechanism, most of them undervalued.
18.
▫️$crvUSD: a potential booster.
Curve is near the launch of its over-collateralized stablecoin.
I will not deep dive into technical details, I will just analyze a few potential benefits:
• More liquidity for pools.
• More revenues generates.
▫️$crvUSD: a potential booster.
Curve is near the launch of its over-collateralized stablecoin.
I will not deep dive into technical details, I will just analyze a few potential benefits:
• More liquidity for pools.
• More revenues generates.
19.
To generate $crvUSD users will need to deposit capital into Curve’s pools and this will contribute to increasing the TVL.
More TVL 👉 less slippage 👉 more transactions volume 👉 more fees 👉 better rewards for $CRV stakers 👉 $CRV price up.
To generate $crvUSD users will need to deposit capital into Curve’s pools and this will contribute to increasing the TVL.
More TVL 👉 less slippage 👉 more transactions volume 👉 more fees 👉 better rewards for $CRV stakers 👉 $CRV price up.
20.
You can easily understand the potential positive correlation between $crvUSD and bribes.
It's some sort of a big cake called “liquidity” where everyone will be involved and fighting for a slice.
This is why it could become a very interesting opportunity.
You can easily understand the potential positive correlation between $crvUSD and bribes.
It's some sort of a big cake called “liquidity” where everyone will be involved and fighting for a slice.
This is why it could become a very interesting opportunity.
21.
Remember that these are personal opinions, and not financial advice.
I’m just trying to rationally think to evaluate a potential opportunity using the bribes mechanism concept + law of supply & demand + interest in the DeFi world.
Remember that these are personal opinions, and not financial advice.
I’m just trying to rationally think to evaluate a potential opportunity using the bribes mechanism concept + law of supply & demand + interest in the DeFi world.
22.
That's it!
• If you liked this thread follow me @IamZeroIka for more crypto insights.
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extensivevision.substack.com
That's it!
• If you liked this thread follow me @IamZeroIka for more crypto insights.
• If you want to have access to more deep guides subscribe to my FREE newsletter, it would be a pleasure to have you.👇
extensivevision.substack.com
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