DeFi Bribes and the so called "Curve Wars"

Hi HODLers,

In life, I usually try to learn one valuable thing a day. This morning, this daily learning happened right when I was sipping my cup of coffee.

Even if I had beenin the DeFi Space for quite a while now, I had never heard of DeFi Bribes (at least a full theorization of it) and the Curve Wars. Did you?

If you did not, please allow me to explain briefly what we mean with these 2 terms and why some OGs think it could actually threaten the overall DeFi Space

What is Curve (CRV)

Curve is the biggest project out there in terms of TVL. It has 23.4bn in assets. They offer pools, lending, borrowing and are the biggest place to lend/borrow stablecoins.

Understanding the power and scale of Curve, you will understand that most of the other projects want to be highly featured in the APY ranking on Curve.io to attract more liquidity and this is where the issues start.

As you have more veCRV you can vote for your pool to be better rewarded and therefore attracting more capital from Curve whales.

To sum it up: DeFi projects are scrambling to get their hands on more Curve tokens (CRV) by first getting their hands on vote-locked Curve tokens (veCRV).

Andre Cronje, the creator of Yearn Finance and a ton of other DeFi projects, built a platform to execute this exact kind of bribe. I see this creation and name as a way to show the issue faced by so-called decentralized protocols/projects. Is it really when a platform has the majority of proxy-voting?

https://bribe.crv.finance/

Convex: The leader in this field owns more than 53% of all CRV tokens currently in circulation.

Convex was designed specifically to acquire as much CRV as possible by offering the highest rewards to users.**

Voices start to call out this situation

If when browsing through Twitter, you see the term: “governance extractable value”.

This is the situation they are referring to.

As Lian J. Kelly, writer at Coindesk phrase it:

Whether the troubling growth of DeFi bribes is truly the “end state of DeFi” or simply its next chapter is for the market to decide. Or the regulators?

Stay safe out there, it is wild...

Sources

• DeFi Bribes Are on the Rise, Coindesk
• Does Your Favorite DeFi Token Vote-Lock?, Coindesk