The other day I found out what eli5 means.
In crypto, it seems every day I am learning some sort of new slang. For those of you that are as uncultured as myself, this means “explain it like I’m 5.” Well, this is exactly what I’m going to do for you to help you understand why Blockstar clients have been advised to get on the Curve train since early September.
ELI5
Close to 90% of CRV supply is locked for 3 years
68.68% APY via Convex at time of writing
Total Value Locked in the Protocol: $19,802,490,613
Weekly earnings for the protocol: $1,283,105.59
No hacks to date!
If you want a deeper understanding, keep reading.
You’re still here. Your hunger for crypto knowledge grows fellow ape. Let’s get into it. Curve is one of the first decentralized exchanges and is governed by a DAO (here is a link to a previous newsletter explaining what a DAO is). Since Curve does nearly $1,000,000,000 per day, the protocol is able to generate revenues north of $183,300 daily. These revenues are then split amongst those who support the protocol by staking either the native token CRV, or any of the other tokens on the exchange. In addition to the protocol fees, CRV stakers are also able to earn more CRV on top of this! This basic description should be enough to explain the utility of the token, now let’s get into the supply dynamics of the token.
Since Curve is governed by a DAO, users are able to vote on how the protocol operates. This is done by locking up CRV for 3 years. As a result, large protocols like Convex and Badger Finance have been in a race to lock up as much CRV as possible to then give them more of a say in how the Curve protocol is governed. Why do they want to do this? Well for example, if Convex finance has enough votes they would be able to propose changes to Curve like possibly allocating more Curve rewards to the Convex finance protocol. These votes are now so sought after that a protocol has even been created named Votium and the sole purpose of this is for people to bribe others to pledge their CRV votes to whatever proposal they may support. There is now a frenzy to secure as much CRV as possible to control the governance of the Curve DAO.
An ode to NFT's and where they will be.
What's the worst thing that could happen to our society? Speaking as a free individual I would have to say an end to free speech, free thought, and the right to be individualistic. I would argue most individuals reading this would agree those three things encompass modern freedom.
Now, what does an NFT of an Ape have to do with freedom and democracy? They are truly decentralized and they represent free speech, thought, and individuality. This is not to ignore what the community and Satoshi have brought forth over the last decade; all I would say is centralization is not too far off with the current trend we are riding. What I mean is the large financialization of crypto has brought in centralization through government, legislation, and third-party support. Now how do we revert to the trend? How does a community ride farther into the abyss without Uncle Sam's "support"?
The Answer: Non-fungibility. Digitizing individuality with true permissionless structure. Take this example of two polar opposites: North Korea and the U.S.A. North Korean citizens, for the most part, are not allowed to own land. The land is governed and owned by the regime and purely is used for the regime. There is no individual that is allowed to take their land, pull out equity through a bank, and utilize liquidity through their asset. In the U.S. this is a basic right. If you own a home there is a way to utilize liquidity off of your real-life asset that you own. But is it truly a permissionless right? I don't think so. Why do I have to go to a bank, a third party, to take out a loan against my real asset? Why do I need permission for utilization?
Non-fungibility breaks that final barrier of centralization. Imagine a market where you could digitize your ownership rights that are backed 1:1. Think of the individualistic power! Why would I need a bank to get a loan when I can use this NFT that holds the right to my property and take out a loan against it through a DeFi lending pool for a 90% loan to value. I do not need to ask Wells Fargo for permission and their risk assessment on my assets anymore. I can utilize my asset and its true potential without third-party approval.
This idea is what we are currently fighting for, whether we see it as a group or not, this is it. The idea of owning freedoms in all forms is what is constantly battled over in congresses of all nations, especially the U.S. Individualism is based on rights, and rights are based on humanity. There will be a day where we enter into the metaverse fully as tech evolution continues, that is inevitable. What is of significant concern is how we utilize individuality when paving the framework for the future.
Non-fungibility is something worth fighting for.
Written by: Theo White and Ryan Celaj