Curve's power game: Yearn, Convex or Stake DAO Who will win?

原文标题：《 CURVE WARS 》

原文作者： Rekt

原文编译： Yangz，巴比特

There is a power struggle going on between the different DEFI agreements.

Yearn, Convex, and Stake Dao are fighting to accumulate veCRV, to have power and influence on Curve Finance DAO, and ultimately to be able to deliver higher returns to their users.

Here's the rule:

● 每个玩家必须通过向其用户提供具有吸引力的收益率来寻求增加 TVL。

● 为了提供最高的收益，每个玩家必须以 veCRV 代币的形式积累积分。

● veCRV 代币允许每个玩家提高他们的收益率并控制 Curve 治理投票，因此允许他们吸引更多的 TVL。

Different players can use different strategies in the same game, but it doesn't make sense to play elsewhere.

There are no losers, only big winners and small winners.

And the game will last forever.

On the surface, there may seem to be three established contenders in this game, however, the reality is much more complicated.

It is not just whitelist agreements that are being fought in the Curve Wars, but also centralized entities that want to incentivetheir currencies or projects.

So, who's fighting whom, and what will the final game look like?

The Convex arrival adds additional urgency to the game that Yearn and Stake DAO are already playing.

"Curve support" (see the Convex footer), which means that some Curve developers invested in the project and helped them write the code.

We can think of Convex as a player Curve entered into their own game.

While this clearly gives them an advantage, their position is not dissimilar to that of Julien Bouteloup (Stake Dao), who is still fighting to control Curve despite being part of the core team.

Andre Cronje and Banteg, two of Yearn's most prominent developers, also took advantage of the competition, earning huge CRVs by contributing to the project, providing liquidity or "pReMiNinG" via what Banteg wrote on Twitter.

In this game, no player can be considered an "outsider"; In one way or another, they all helped create Curve. However, this does not mean that the competition is less intense.

CRV was launched on August 13, 2020.

Ten days later Andre Cronje sent the tweet that marked the start of the Curve War.

AC has acquired a lot of power over the Curve protocol and is trying to incentivise his new Ypool.

Curve's response makes even more sense when you consider who controls the 0x431 wallet.

Nansen lists 0x431 as the first wallet to cultivate the YFI. In addition to holding a lot of K3PR, the wallet is now also voting to increase the weight of the FTOM pool, so maybe you can draw your own conclusions.

Over time, as more users lock their CRVs into Vecrv and voting rights become less centralized, Curve will continue to grow......

It was the Yearn Backscratcher Vault, launched in November 2020, that took the fight to the level of protocol VS protocol.

By permanently locking their CRV to the Backscratcher Vault, (and thus granting their voting rights to YearN), users can get a higher APY than if they locked their tokens to Curve itself.

Yearn can then use these CRVs to influence Curve's votes in their favor and increase returns for all of their Curv-based pools; The result is more users and higher TVL.

At this point, Yearn has no real competitor. Cronje is building his decentralized monopoly, and no one is trying to stop him.

Stake DAO and Julien Bouteloup

Stake Dao is a direct competitor of Yearn Finance. Both platforms provide users with yields on a variety of assets, and both use Curve as the base layer for their primary vaults.

The Stake DAO's arrival was not without drama. Yearn's developers accused Julien of falsifying their protocol and not adding anything of their own, which led to Julien being kicked out of several private group chats and further inflaming a feud that had been brewing for some time.

As soon as the Stake DAO appeared, Yearn began aggressively promoting their Yvecrv vault on Twitter. Then the struggle began.

Between January and March 2021, Yearn and Stake DAO began to compete directly for CRV deposits. Each agreement actively promotes their vaults and lobbies CRV whales to deposit money on their respective platforms.

When YearN launched in early February. > ETH pooling and allowing users to make withdrawals from backscratcher improves transactions at the same time, increasing competition because users' assets are no longer stuck with that strategy.

While users can now extract their CRV, the vault continues to grow as Yearn takes advantage of their partnership with Sushiswap to incentivise it. > The ETH pool, and creating a higher APY, increases the demand for YVECRV.

And this improved user experience forces Stake DAO to provide the same service. In May, Stake DAO released a SdVECRV balance pool with a SdVECRV /CRV ratio of 90/10, still incentivize users to lock their CRV. But it also provides some exit liquidity for those who want to unlock.

The figure above shows the steady accumulation of Yearn and Stake DAO into veCRV, while Convex rises abruptly in May.

But both sides have reacted differently to the Convex arrival.

Yearn actively promotes their accumulation strategy, while Stake Dao decides to take a different route.

Instead of using their veCRV to promote their own vault, Stake DAOs have chosen to migrate their Curve pool to operate at Convex. This allows them to currently offer a higher APY than Yearn. But in the future, the Stake DAO may also regret that it has given up more power to the already powerful Convex platform.

As shown in the figure below, the proposed weight change shows how both the whales and the project are fighting to galvanize their agendas.

How will concave use their strength?

At only 2 days and 14 days, respectively, the Convex overtook the Stake DAO and the yearN.

At the end of the 4 year CVX incentive program, the concave will likely have enough TVL and platform income to provide a sustainable high APY to the CVXCRV pledge. At that time, Curve will also launch new products, and as Curve grows, Convex will grow.

Since they are already well positioned, if Convex decides to come up with some unique strategies of its own in the future, then it can easily compete with Yearn and Stake DAO, not just for CRV.

As Defi evolves, more "yield aggregator" platforms will be launched, and the demand for building on top of Curve will only increase. There won't always be just three competitors.

The race is far from over, but entry requirements are making it harder and harder to get in.

In order for a protocol to use Vecrv, it must be included in the "Smartwall Whitelist" contract for Curve.

Because the veCRV of a smart contract address can be transferred between owners, a smart wallet goes through a whitelisting process to prevent abuse.

Currently, only Yearn, Stake DAO, and Convex are on this list.

At a CRV token price of $2, a protocol must attract about $130 million worth of veCRV (30% of the supply) to be whitelisted on Curve.

Even with the money, however, the whitelist is not easy to access. There have been several unsuccessful proposals that have been rejected without sufficient direct interest in the Curve or its token holders.

All those involved in Curve governance are incentivized to prevent any whitelist protocol, or protocol listed in the Curve UI, from selling excess CRV.

A common protocol strategy is to sell cultivated CRVs to create an APY for their own users.

This was a hot topic on the Curve governance forum and was protested by many token holders as a reason to exclude applicants from the whitelist.

It has been proposed to distribute farming rewards in the form of VECRV rather than CRV, or in a ratio of both, to slow Yearn's tilling/dumping.

When Alchemix wanted Aleth to be listed in the Curve UI, Curve stepped in and blocked it, which caused some controversy. Curve says this is to prevent "double dumping", but some question whether Curve should be involved in defending its own token price.

We caught up with Alchemix lead developer Scoopy Trooples to find out exactly what's going on.

Scoopy Trooples says that through Charlie, I was able to contact Curve. A few weeks before we launched Aleth, I was asking about the Curve ETH meta-pool. He said they didn't have (the plan). I replied, it seems necessary. uniswap  Or the balancer. Charlie: I made an Aleth/ETH Curve pool for you. Then, a few weeks later, when I told Charlie we were ready to start, he said he didn't want the pool because Alchemix was using Yearn and "would dump too many Curves." Then, a few days before launch, I scrambled to find an alternative and complained about the situation in eGirl, where Devopsfan, a member of eGirl, offered to put aleth on the Saddle. Seeing that Saddle had the attributes of a soft hook pool we wanted (because it was a Solidity version of Curve), we accepted their invitation and deployed on it in a short period of time. This is not an embrace of Curve. It's just the best thing to do for the benefit of our agreement. While I like working with other agreements, I will not compromise our project to stay true to another agreement. If we choose   Sushi, Uni, or Balancer, Aleth hooks will be harder to set up and maintain.

Crypto Twitter loves drama, so the camp doctrine of these events has made it a popular topic.

However, some people view it differently.

Parasitic protocols can be kept off the whitelist, but it is harder to combat forks.

First there was Swerve, with its "Anonymous" team, and then Saddle, with their venture capital money.

Curve has valid, enforceable intellectual property in its code, but that hasn't stopped either of them from trying to copy.

Saddle Finance directly copied the code from Curve, but Curve was written in Vyper and Saddle was rewritten in Solidity.

Curve could stop Saddle by enforcing these intellectual property rights and send a warning signal to future competitors, but should they?

For now, its users are undecided.

The main issue at issue is not whether such plagiarism exists at Curve, but whether it should be pursued. Many forum members think this is the action of Tradfi; Is a reargument that does not fit with DEFI's open source culture.

But Curve is not the only one looking for a lawyer.

Same goes for the new Uniswap V3. They claim to be a competitor to Curve and are going on the offensive to keep the code for themselves.

Uniswap V3 operates under a commercial source license that restricts unauthorized use of its source code for two years so that "the Uniswap community can take the lead in building an ecosystem around the Uniswap V3 core code base."

It remains to be seen how effective this license will be for an anonymous team.

But what if "incompatible math" is actually the best moat......

It's understandable that any developer would want to protect their work, especially when it's so unique and economically valuable, but what does that have to do with the open source Defi? Will either party proceed with such litigation?

Robert Leshner disagrees with the idea......

Maybe Curve suing Saddle isn't pretty, but what if Curve suing Tradfi intruder?

We will not fight among ourselves forever......

Perhaps now is the time to set a precedent; Will the next Curve war play out in court?

Curve VS Uniswap

The biggest challenger to the Curve protocol is the latest Uniswap V3.

Some expect Uniswap V3 to become a "Curve Killer" with its Active Management LP technology.

While the Curve isn't dead yet, the Uniswap V3 has taken a big chunk of their market share. In June 2021, Uniswap V3 accounted for 40% of all stablecoin transactions.

Since the two offer very similar results on major stablecoin trading pairs under $10 million, for most users, their choice between the two will be based primarily on personal preference rather than financial savings APY.

But that hasn't stopped the two agreements from having a public tussle, as they fight to get the best rate for users.

Both sides are fighting for victory, and Curve is now in direct competition with Uniswap by introducing trading in volatile assets into Curve V2.

The battle continues...

Although Curve is at the centre of so much drama, its founders rarely speak in public.

Detective Rekt, however, always goes straight to the source.

We caught up with Michael Egorov, the founder of Curve, and sat him down to clarify things.

Rekt:

Hi, Michael, thanks for talking to us. It has been almost a year since the introduction of CRV tokens, and token economics now defines a large part of the industry. Is Curve evolving as you hoped?

Michael:

Yes, I think so.

Rekt:

All right, without further ado, let's cut to the chase. What requirements must the protocol meet when applying for SmartwalletWhitelist?

Michael:

Basically, a wallet should not be a saleable note (it is a saleable value). And projects should be audited by reputable companies.

Rekt:

There are only a few whitelist agreements, and those that are whitelist have a huge advantage over all others. Isn't this a conflict of interest situation for Curve, because they "support Convex", and "Convex" gains from never allowing other agreements to go on the whitelist?

Michael:

Well, I think there should be no problem if the project is absolutely safe and can benefit from whitelisting. The trick, of course, is that if Yearn, concave, and Stake DAO don't want to whitelist a project, then I won't have enough votes to overturn them. Because the projects themselves have the right to vote. But Yearn voted in favour of placing Convex on the whitelist!

Rekt:

Why was Alchemix rejected?

Michael:

Just checked in. Alchemix never asked, nor did it have a proposal. My understanding is that they are using Yearn's second order protocol, so it's not clear what the benefits are. If they start using Curve directly, then... In short, they need to ask/write a forum post.

Rekt:

They've decided to use your competitor Saddle Finance. What do you think about Saddle?

Michael:

That's a completely different thing from the wallet whitelist, which is a soft vote to go live in the UI. DAO participants were hesitant to list Aleth because collateral would dump CRVs. I think, anyway, it's good to go online in this case. But because they were going too slowly, they still chose Saddle. Aleth was attacked a few days later. In principle, if it's safe to go online again there's no problem, they just have an operational problem.

As for Saddle, I think Saddle violates Curve. fi's intellectual property because it actually translates Vyper's code into Solidity. This can be proved in court. But I think it's a worthless project, so there's no point in doing that. Moreover, litigation hurts the founders of Saddle, but not the venture capitalists who are pushing it. As a result, it may make even less sense.

Rekt:

"If you want the courts and politicians to protect and control you, there's finance," says Robert Leshner. "But if you want a flexible, self-sustaining, open, scalable system, there's DEFI." Do you think there is a place for litigation in decentralized finance?

Michael:

I think as long as one legal entity can bring a lawsuit against another legal entity, it's quite possible. Curve.fi and saddle. But it's a very strange thing to hear from Robert. Compound sued DForce when they cloned their first version. This is a bit like saying Compound is not DeFi. But anyway. I don't like the idea of suing saddle for any other reason.

Rekt:

Very interesting. We need to talk to Mr. Leshner about this. In addition, Yearn has been described as a "parasitic" protocol due to the large amount of CRV they farm and dump. What do you think of the way each whitelist protocol uses Curve, and what would you like to see in the future?

Michael:

I don't think "planting and dumping" is parasitic, it's part of the game. But of course dumping should not be doubly encouraged. I think the way Yearn works is good - it's not parasitic. People just shouldn't make recursive farm-circular dumping (e.g., imagine encapsulating a toKEN farm in a pool that will get more CRV and dump it, then......)

I have recently had some ideas about those stable tokens, but dumping (or collateral) could be incentivized in different ways, such as incentivizing trading volume (rather than current liquidity). It's not clear how this will work, but it feels like it will be good for Curve and tokens.

Rekt:

In terms of volume, the foreign exchange industry currently trades about $6.6 trillion a day. You can also see Curve taking some of Tradfi's volume in the future. If so, how do you see adoption?

Michael:

That's the plan. I think it could be done by supporting communication between stablecoins of different denominations (not just dollars). Of course, it should include these increases.

Rekt:

Very good. But you're not the only one aiming to disrupt this market. Uniswap V3 has taken a significant chunk of your stablecoin trading volume. What do you think of their V3, and how does Curve plan to compete with Uniswap?

Michael:

There are several ways. One, we only believe in automated methods, and UNISWAP 3 doesn't seem to. A less automated approach works well for stablecoin/stablecoin transactions, but it is extremely challenging for unstable currency pairs. The figures show that the vaults designed to automate Uniswap v3 liquidity management are at a loss if compared to "Uniswap2 without charge", which means they are very sub-optimal. Therefore, we may fight back on a more volatile [asset] front (which requires a lot of optimization work and is currently under way).

As for stablecoin/stablecoin pairs --Uniswap currently benefits from the fact that it is very well known to users who are not familiar with the Dex aggregator. Even for UNISWAP 2, the same is true for trades through the USDT/USDC pool (where traders lose a lot of value due to slippage).

Rekt:

Curve Tricrypto, the first pool to use volatile assets, was launched nearly a month ago. Are you satisfied with its performance so far? What's next?

Michael:

I will restart it: make some changes based on what I learned, plus get a faster emulator and find more optimal parameters. A lot of things work really well, but it takes +1 iteration. That's why we don't do "100% final release and replace everything". This is a rolling release system, so we have the flexibility to iterate.

Rekt:

Thank you for talking to us, Michael. Oh, and one more thing...... Have you heard from 0xc4ad recently?

Michael:

Ah. I don't know, no. Unless you think the anonymous deployer of the ETH2 pledge contract is 0xC4AD...

Make no mistake, Rekt readers, what we're seeing here is a struggle for power, not wealth.

If you're reading this, the founder himself told us Curve's goal is to disrupt a multi-trillion-dollar market, then you probably share his vision.

The increasing power of decentralised exchanges is, ironically, a reason why different parties want to centralise that power back to their advantage.

While the whales scramble for power, retail investors continue to seek wealth, and they can only benefit from it.

The future of this multi-trillion-dollar industry is being shaped by a handful of developers who are seizing the opportunity to build their empires while the space is still young.

Curve's first-mover advantage means it will be hard to displace them, and while the competition is heating up, the team has a lot more to offer.

User interfaces may not be to everyone's taste, but does it really matter if the future of Curve is as a base-layer protocol rather than a "direct-to-user" experience?

If you think Curve is a tough battle, wait for the Convex battle to begin.

The original link

Welcome to join the official BlockBeats community:

Telegram Subscription Group: https://t.me/theblockbeats

Telegram Discussion Group: https://t.me/BlockBeats_App

Official Twitter Account: https://twitter.com/BlockBeatsAsia