Article by Steven, E2M Researcher
Source: E2M Research
Reflections on Daily Discussions
After the theft incident involving Curve at the end of July last year, various OGs, institutions, and VCs came together to provide substantial support. Bitmain and Matrixport co-founder Wu Jihan stated on social media, “In the upcoming wave of RWAs, CRV is one of the most crucial infrastructural components. I have bought in at the bottom, but this does not constitute financial advice.”
Huang Lizheng confirmed on social media that he acquired 3.75 million CRV through OTC from Curve’s founder and staked them in the Curve protocol. The following day, Sun Yuchen’s associated address transferred 2 million USDT to the Egorov address and received 5 million CRV.
Subsequently, projects like Yearn Finance, Stake DAO, as well as institutions and VCs like DWF, all actively participated in the rescue operation for CRV.
The significance of these groups rallying behind Curve and the reasons for their intervention remain a perplexing puzzle. Profitability is now a matter of horizontal comparison in the web3 realm, moving away from specific niche tracks.
CM: Will there be any impact if Curve’s founder sells his chips and then has no significant ties with Curve? Not a problem. Foundational protocols do not require further development after a certain stage. They are mature enough. Leaving aside market dynamics, discontinuing development won’t affect its usability. Many market rescuers have recognized this point, hence the motivation. Curve has several models that empower VeCRV holders to govern autonomously. With the existing institutions, parameters, and configurations, self-operation is entirely feasible, aligning with the original intention of decentralized applications, plummeting authority to the community. DEX Llama stablecoin algorithms + lending market VE models bribery and liquidity systems As for market performance, it’s a separate matter. Fundamentals are likely slightly worse than the previous one. There may not be a significantly notable performance compared to before, but there will still be demand for prolonged liquidity mining cycles. If one perceives the on-chain environment as a thriving ecosystem, Curve still holds promise, something Uni cannot fix. Curve presents a comprehensive framework, completing a decentralized endeavor with the token. Prospects across cycles could be better if one believes in future on-chain incentivization. Buyers include numerous project teams. Liquidity mining emerged as a core method in the previous cycle. Projects in their early stages were all about leasing liquidity. Crv addressed the problem of project teams not needing to inflate their token economy in the initial stages but leasing Crv liquidity, which in turn resolved token inflation, redirecting tokens toward other utilities. The token preserves significance post-unlocking. Crv also supports non-stablecoin transactions akin to Uniswap. During the initial purchase rush, priority was given to project teams. Projects won’t perish, nor will they be quickly devoured by Uniswap.
1. Events at Time Point 1
Arkham revealed that Curve founder Michael Egorov currently has $140 million CRV pledged as collateral across five accounts in five protocols, borrowing $95.7 million in stablecoins (mainly crvUSD). Among these, Michael has $50 million crvUSD borrowed on Llamalend, and Egorov’s three accounts represent over 90% of the crvUSD borrowed in that protocol.
Arkham pointed out that a 10% decrease in CRV’s price could lead to the initiation of position liquidations. Subsequently, as CRV’s price decline worsened, dropping below $0.26, reaching a historic low, the CRV lending positions across Michael’s various addresses gradually fell below the liquidation threshold.
2. Curve Data Comparison as of June 16, 2024
Trading volume – 3pool ($12.3m), steth ($6.7m), fraxUSDC ($756.8m).
Total Value Locked (TVL) comparison from the previous year: fraxUSDC ($15.8m), steth ($249.7m), 3pool ($178.3m). Frax’s TV
