DeFi Bribes and the so called "Curve Wars"
Hi HODLers,
In life, I usually try to learn one valuable thing a day. This morning, this daily learning happened right when I was sipping my cup of coffee.
Even if I had beenin the DeFi Space for quite a while now, I had never heard of DeFi Bribes (at least a full theorization of it) and the Curve Wars. Did you?
If you did not, please allow me to explain briefly what we mean with these 2 terms and why some OGs think it could actually threaten the overall DeFi Space
What is Curve (CRV)
Curve is the biggest project out there in terms of TVL. It has 23.4bn in assets. They offer pools, lending, borrowing and are the biggest place to lend/borrow stablecoins.
Understanding the power and scale of Curve, you will understand that most of the other projects want to be highly featured in the APY ranking on Curve.io to attract more liquidity and this is where the issues start.
As you have more veCRV you can vote for your pool to be better rewarded and therefore attracting more capital from Curve whales.
To sum it up: DeFi projects are scrambling to get their hands on more Curve tokens (CRV) by first getting their hands on vote-locked Curve tokens (veCRV).
Andre Cronje, the creator of Yearn Finance and a ton of other DeFi projects, built a platform to execute this exact kind of bribe. I see this creation and name as a way to show the issue faced by so-called decentralized protocols/projects. Is it really when a platform has the majority of proxy-voting?
Convex: The leader in this field owns more than 53% of all CRV tokens currently in circulation.
Convex was designed specifically to acquire as much CRV as possible by offering the highest rewards to users.**
Voices start to call out this situation
If when browsing through Twitter, you see the term: “governance extractable value”.
This is the situation they are referring to.
As Lian J. Kelly, writer at Coindesk phrase it:
Whether the troubling growth of DeFi bribes is truly the “end state of DeFi” or simply its next chapter is for the market to decide. Or the regulators?
Stay safe out there, it is wild...
Sources
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Posted Using LeoFinance Beta
Hey @vlemon
I didn't know how DeFi worked either, but it is really interesting, although these concepts are a bit of a challenge for me, I'm still don't think that I fully understand smart contracts lol
I am actually stopping by because I saw your Punk avatar and I wanted to introduce myself.
I'm gonzo... lol
Recently, I started a Punk community on Discord called Punk Legends to offer Punk Giveaways; to curate all the new Punk holders that just joined Hive and to build a game using our Punks. You're welcome to join us, here is a link:
https://discord.gg/JJUEWAKQ
And if you happen to know of anyone that wants a free punk, send them over to me, because I'm trying to make it really easy for those that felt like they missed out. I actually missed the minting too, so I know what that's like. Anyways, it's really nice to meet you and I hope that we get a chance to chat on Discord.
Thanks for letting me know about this community. I will check it out when I have a minute.
Cheers !
Posted using LeoFinance Mobile
https://twitter.com/VinnieLemon/status/1482122258717888515
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