Forks of OlympusDAO have struggled to gain traction and attracted a lot of criticism. But that hasn’t stopped a new contender from coming down from the mountaintop with another proposition.
The new fork, called [REDACTED], is gaining momentum as it takes a different tack than its originator. Since the dapp went live on Dec. 15, BTRFLY, [REDACTED]’s token, has soared to a $468.8M market cap, according to CoinGecko. [REDACTED] is the second most valuable Olympus fork as of Jan. 10, trailing only its originator and Wonderland, whose TIME token has a $1.9B market cap, according to fohm.io.
[REDACTED] has the apparent support of DeFi influencers like Tetranode and DeFiGod, each of whom have more than 100,000 Twitter followers. [REDACTED] has further differentiated itself as being a “complimentary subDAO for OlympusDAO,” as the protocol’s website states. Indeed, the project spawned from in the OlympusDAO forums whose governance would make [REDACTED] “the first official branch of OlympusDAO,” shortly afterwards.
Generally Olympus forks have become known for rug pulls, or simply not producing anything of value. “Forks sell a useless asset to capitalize a treasury,” tweeted Ryan Watkins in October.
But [REDACTED]’s co-founder, 0xSami, is pushing for the protocol to move beyond Olympus forks’ bad reputation. “People look past what we are trying to do here and are quick to label us an ‘OHM fork,’” he told The Defiant over Discord. So what does [REDACTED] do? In a nutshell, the protocol aims to acquire governance tokens with voting power in an effort to make BTRFLY a “meta-token” tied to the value of the assets in the project’s treasury.
“The goal is to promote governance participation through the BTRFLY token, positioning it as an ‘index’ of ‘veTokens’ in DeFi,” Che, who works on [REDACTED]’s policy team, told The Defiant.
“Ve” or voting escrow tokenomics have been gaining steam as DeFi projects look for ways to imbue their assets with value. This can happen by allowing users to lock up their tokens for a set amount of time in exchange for perks like boosted rewards and increased voting rights.
“We are very bullish on conviction governance (longer lock = more voting power),” said Che. “We want to encourage participation in voting by continuing the ‘ve’ narrative.”
[REDACTED] is focusing on tokens surrounding the Curve Finance ecosystem, which supports the automated market maker (AMM). CRV, Curve’s token, and CVX, Convex Finance’s token have both become crucial assets in what’s become known as the Curve Wars — a dynamic where people and protocols fight over CRV emissions to liquidity providers. [REDACTED] is betting that’s a good place to start its foray into acquiring veTokens.
The fight stems from the voting power CRV has.
As an AMM, Curve depends on users to provide liquidity. And Curve rewards those liquidity providers with CRV tokens. And the more CRV rewards for a given pool the more users will deposit into that pool. And guess what dictates the CRV rewards? Voting-enabled CRV, or veCRV.
Basically, CRV can be locked for a token called voting veCRV, granting its holders voting power over where rewards go. Curve is the largest protocol in DeFi in terms of total value locked (TVL) at $23B, according to DeFi Llama.
It’s heady stuff, but CRV voting power, or veCRV, has proven valuable to other protocols, whose tokens users deposit in Curve — there’s even a site which accepts “bribes” for veCRV votes.
Likewise, CVX, Convex Finance’s token is also used to maximize CRV boosts. Like Olympus, [REDACTED] has a bonding program that gives users BTRFLY tokens in exchange for target assets. As of Jan. 11 [REDACTED] has bonding available for CRV, CVX token, and OlympusDAO’s OHM token.
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[REDACTED] has a set strategy for each of the three assets. “With the CRV, CVX, and gOHM liquidity that we’re building out, we want to ensure that as a protocol we are leveraging them for revenue while not being in the business of farming and dumping,” says the project’s documentation.
That’s the advantage of protocol-owned-liquidity, a key tenet of “DeFi 2.0”. Through Olympus’ bonding mechanics, [REDACTED] is able to do what it, as a DAO, wishes with its assets.
That includes voting, generating revenue, and potentially voting in DeFi to optimize revenue. This may create a flywheel whereby the increased revenue leads to increased voting power, which leads to increased revenue. At least, that’s the idea.
[REDACTED] is already looking beyond the Curve wars to acquire other assets that protocols may soon be fighting for — the project announced an acquisition of Votemak on Jan. 6, which allows users to accept bribes for their TOKE tokens.
TOKE is the native token of Tokemak and is used to dictate where the liquidity of other governance tokens, like Synthetix’s SNX, should go (e.g. automated market maSushiSwap or Uniswap) and what it should be paired with (e.g. stablecoins USDC or DAI)
[REDACTED] sees wars to control TOKE votes as “imminent” as the Olympus fork stated in their announcement of the acquisition.
[REDACTED] has a treasury worth $121.4M as of Jan. 10, according to a Dune Analytics dashboard linked by the project’s website. That puts BTRFLY at a premium — if valuing the token against [REDACTED]’s assets in the treasury, BTRFLY should cost around $637 based on its 190,304 supply.
Instead, BTRFLY is worth $2,429, as of Jan. 10, making it more expensive than the underlying assets it represents. Realkinando, [REDACTED]’s other co-founder addressed the high ratio of BTRFLY market cap to the value of protocol’s treasury on Twitter.
Still, the project has the blessing of Olympus, making it a unique fork of the protocol-owned-liquidity innovator. For DeFi enthusiasts, it’ll be worth watching whether the project can sustain itself, and just how much a treasury of actively-used, voting tokens is worth.