Cronje and Sesta Reveal Details of ‘Solid Swap’ Project to Spur Fees
Two DeFi trailblazers have joined up to create a new project called Solid Swap.
By: Samuel HaigByte
Details are beginning to emerge regarding the highly anticipated project from star DeFi devs Andre Cronje of Yearn Finance and Daniele Sesta of Wonderland and Abracadabra.
Cronje and Sesta appeared together on the Jan. 20 episode of the Frog Radio podcast to discuss the upcoming project. Dubbed Solid Swap, the protocol will aim to incentivize fee generation, rather than total value locked (TVL) as is currently popular in the DeFi sector. Long-term token locks and voting participation will also be rewarded.
Solid Swap was teased in early January, with Cronje tweeting on Jan. 1 that he would deploy “a new experiment on Fantom” by February. Four days later, Sesta revealed that he and Cronje were collaborating on the project. The protocol has been informally referred to as “ve(3,3)” on social media recently.
Andre Cronje founded Yearn Finance in 2020.
The protocol seeks to adapt the vested escrow (ve) concept that was pioneered by stablecoin DEX and top protocol by TVL, Curve. Vested escrow allows users that lock funds over the long-term to amass greater voting rights than their short-term counterparts.
This system also gave rise to the second-largest DeFi protocol, Convex Finance, which allows users to lock CRV in exchange for its native CVX token to retain voting rights while staying liquid.
Sesta notes that unlike Curve’s model, which only incentivizes TVL growth, Solid Swap is intended to reward volume and fee generation — driving revenue for DeFi projects. Fees will only be earned from pools for which users participate in governance, with the devs mobilizing game theory to maximize voter participation.
He challenged existing token emissions schemes, asserting that only TVL and farming are being rewarded.
Daniele Sesta was a 2021 Defier of the Year.
Sesta asserted that token emissions should be provided to “the pairs that are actually creating value to the protocol and generating fees” to drive sustainable growth long-term.
“At the end of the day right now, we are looking at a lot of short-term thinking, we want to enforce more long-term sustainability,” he said. “The more we become sustainable, the more we redirect rewards towards pools that are actually valuable for the users, the more we grow DeFi because it is the user ultimately that has to be the focus.”
20 Fantom Projects
Concrete details regarding the project’s token are scant at this point, with the devs currently eying ROCK as a ticker.
Seeking to incentivize development on the Fantom network, they note a snapshot of the top 20 Fantom projects will be taken to inform the token’s distribution. It’s unclear upon which criteria the ‘top 20’ will be judged.
The airdrop will be distributed as locked tokens, preventing protocols from dumping them on receipt. They noted that they chose to distribute directly to protocols due to the project’s experimental nature and their disinterest in raising money toward the venture. “All of these projects will have time to decide where to allocate rewards,” Sesta said.
“We don’t want to raise money, raising money just adds a lot of complications, a lot of flags,” said Cronje. “From an experimental point of view, it’s just not worth it to risk it.”
Drawing inspiration from Uniswap v3, Sesta noted that locked tokens can be encapsulated as an NFT, allowing users to remain liquid while looking at tokens over the longer term.