Governance Token Wars; The Exit Scam that Wasn't; YFI Worth More than Bitcoin
Also, Aragon's plans for a DAO, and the NEAR-Ethereum bridge
Hello Defiers! So much going on in DeFi,
- Governance token wars are erupting
- YFI is now worth more than Bitcoin
- Exit scam false alarm
- Aragon’s plans to decentralize protocol
- Near’s bridge to Ethereum
[UPDATED on Aug. 21 to clarify Aragon’s Phoenix phase]
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Governance Token Wars Ensue
Communities are clashing to farm CRV.
Yesterday, Curve Finance’s pool of tokens which are deposited in Compound Finance saw a $60M spike after its CRV reward APY jumped to over 300% , the highest of any pool at the time of writing.
💡A reminder that Curve rewards liquidity providers with its CRV token, which they receive on top of interest rates from lending protocols such as Compound.
Users can lock CRV governance tokens and “vote” on the weighting of different pools, a feature called ‘Gauge Weight Vote’ . The higher the weight, the more CRV the pool earns.
A 40% increase in CRV’s price earlier this week, the highest 24h change since launch, is spurring speculation that traders are buying the token to lock it in the DAO and increase rewards for their pool of choice by voting to increase the Gauge weight.
Julien Bouteloup @bneilujGovernance war on fire! Someone bought $CRV on the market pushing the price up, locked $CRV into Curve DAO and used dao.curve.fi/gaugeweight to weight-vote for compound pool to make rewards on steroids 307% Gov is POWER 🔥 tip: someone from @compoundfinance or a nice $COMP VC 😏
Julien Bouteloup @bneilujYou guys want a tip? Tonight there will be a market pressure to buy $CRV. Just saying. It's simple math. https://t.co/Do38ZIjxST2:54 AM ∙ Aug 20, 2020169Likes44Retweets
Given the fundamental role yCRV plays in the yEarn ecosystem, many are memeing that “this means war” for COMP and YFI holders.
While there is no direct mechanism for CRV to increase COMP price, yEarn yVaults harvest CRV rewards to increase APY’s —a big reason why the token has seen such a strong runup this week. The higher weight for Compound’s pool means fewer rewards for the yCRV pool, and lower returns for yVault LPs.
Yearn Fights Back
yEarn passed a vote to lock its ~$2M early-LP CRV treasury in the DAO for a 2.5x multiplier on all future rewards and to participate in governance weighting. This means that yEarn is looking to take a competitive stance on being the Curve pool with the highest CRV APY at any given time.
yearn.finance @iearnfinanceUpdate on CRV distribution, following strategies held yUSD; 0x8816B2Fb982281c36E6c535B9e56B7a4417e68cF 0xBE197E668D13746BB92E675dEa2868FF14dA0b73 0x2De055fec2b826ed4A7478CeDDBefF82C1EdFA70 Allocation; 1606 39433 568648 In process of claim strategies, more details to follow
5:42 AM ∙ Aug 16, 202085Likes11Retweets
This is the first time we’ve seen competing parties use governance token to their advantage, and one which may give CRV inherent value as the yield farming rush continues.
The #SmartCon virtual Smart Contract Summit is packed with content and even more keynotes
Here are a few highlights:
- Spencer Dinwiddie 🏀 The Brooklyn Nets star tokenized his NBA contract, making new models of sports finance possible. He’ll explain how and why blockchain finance is coming to disrupt professional sports.
- Ed Felten ⏩ Former Deputy CTO of the U.S., Princeton Professor, & Co-Founder of Arbitrum’s Offchain Labs share the latest research advances in L2s for high transaction throughput to scale smart contracts.
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Join these keynotes and many more panels, tech talks, and AMAs at #SmartCon on August 28 & 29.
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YFI is Now The Most Valuable Token in All of Crypto
Yearn Finance’s YFI last night became the first token with non-negligible volume to surpass the price of Bitcoin. And it did so after being live for a month.
YFI’s price soared above $12k last night, while Bitcoin still hovered below that milestone, and has kept rallying. It’s trading at over $15k today.
YFI quickly became the darling of DeFi when Yearn’s creator Andre Cronje decided to distribute it only among those who supply liquidity to the Yearn protocol and yToken pools. There was no pre-sale to investors, there was no allocation for the Yearn team, and it wasn’t sold through an exchange. Cronje called it “valueless.”\
It was truly the token for the people, and YFI holders would have full control of Yearn. One of the first decisions was to cap YFI supply at 30,000, of which most have already been issued, and is one reason some holders use to justify the price.
DeFi traders pounced as soon as it was issued and made YFI jump to $1,000 from around $30 on its first day of trading. From there, it just kept climbing.
Exit Scam or Good Night’s Sleep?
With DeFi token launches starting to feel like 2017 ICOs, it’s inevitable that scammers will be lurking.
Yesterday afternoon, some suspected ProxiDeFi of being one of the first to exit scam by removing all liquidity against their CREDIT-ETH Uniswap pool.
The cross-chain derivatives lending protocol shared details of their Mesa offering, with roughly 15,751 trying to land an allocation in the batch-order based sale.
It was at this time that the core team went to bed and chaos ensued. The Telegram group was quickly overrun with profane images due to a lack of admins being present to moderate.
While team members have resurfaced to say all is well, the project's image was temporarily tainted by so-called moonboys (crypto traders waiting for tokens to rally) suspecting the team of exit scamming for trying to get a good night's sleep.
No Evidence of Scam
When looking at the CREDIT-ETH pool, it appears that 400 of the original 550 ETH provided by a liquidity provider is still present at the time of writing. There is no evidence of a large liquidity removal which would signal the ‘rug pulling’ community members were rallying around.
ProxiDeFi @_ProxiDeFiToday is an amazing day. The liquidity pool of ETH/CREDIT trading pair exceeded $2 million US dollars within 6 hours and successfully entered into the top 30 trading pairs on the @UniswapProtocol .
2:16 PM ∙ Aug 20, 202031Likes9Retweets
If anything, this goes to show that DeFi is a 24/7 game, and that things are quickly snowballing out of control for teams fundraising through unregulated, decentralized platforms like Mesa and Uniswap for their initial offerings.
A DAO for the DAO Protocol
Aragon plans to decentralize its protocol for DAOs through the advent of its own DAO in a two-phase rollout.
Aragon 🦅 @AragonProjectThe next phases of the Aragon Network DAO are here: Phoenix and Firebird 🔥 🦅 During Phoenix, executive power over Aragon Court will be passed to ANT holders ⚖️ Learn how to help with the transition and what to expect in the coming phases 👇 aragon.org/blog/aragon-ne…
5:12 PM ∙ Aug 19, 2020126Likes50Retweets
The newly announced Aragon Network DAO allows ANT holders to:
- Enact and amend the Aragon Network Agreement
- Amend the DAO and its parameters
- Govern key Aragon Court parameters
- Govern a common funding pool
Rather than release control today, Aragon will transition through two phases; Phoenix and Firebird.
With Phoenix, Aragon will pass executive control from the Interim Governance Council featuring the project’s CEO Luis Cuende and community-stars like Griff Green and Jesse Pollak to ANT token holders.
At some point in the near future, the Firebird Phase will kick off following the ratification of the Aragon Network Agreement - or the project’s manifesto on how future governance is handled, and control of the Aragon Network is transitioned from the Governor Council to ANT holders.
With the promise to make Aragon ‘financially sustainable’ it will be interesting to see how ANT token holders rally around what the project is touting as ‘the end of its original roadmap’ into new, uncharted territory.
Near is Building Bridge to Ethereum
Near is building a bridge to Ethereum which aims to make the two blockchains interoperable. The bridge is currently in testnet.
NEAR’s Rainbow bridge is aiming for users to be able to move assets and data between the two blockchains and for apps that seamlessly communicate across the two networks. Developers who build on NEAR will have access to all the assets on Ethereum, and developers who build on Ethereum can move gas-fee critical parts to NEAR, while keeping their Ethereum user base, near co-founder Alex Skidanov wrote.
The Rainbow bridge does not require the users to trust anything but the blockchains themselves, and doesn’t require any special permissions to deploy, maintain, or use, according to a blog post by Near. Latency for NEAR->ETH interactions is 4 hours, and will be about 14 seconds once EIP665 is accepted, the post said.
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About the founder: I’m Camila Russo, author of The Infinite Machine, the first book on the history of Ethereum. I was previously at Bloomberg News in New York, Madrid and Buenos Aires covering markets. I’ve extensively covered crypto and finance, and now I’m diving into DeFi, the intersection of the two.