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Is there any hope for Curve, which has fallen by 99%?



Lu Xun said: There is no liquidity in this world. When Gouzhuang arranges two trading pairs, arbitrage space is created, and liquidity is formed. Hello everyone, I'm Pepe. I don't know whether it's the starting point of the next bull market or the next short-selling opportunity. I'm here to make up for a defi coin evaluation. The project I'm going to talk about today belongs to many people who know it but may still with a sense of distance and its governance token crv. Crv was recently selected by the circle as the worst defi currency in 2020, and it ranks at the top of the drop list of defi projects made by an overseas exchange: This is the data of the previous few days. According to today's price of 0.55U, it has been calculated The highest point fell by 99%. . What caused it to be so miserable belongs to another innovation in the DeFi trend - smart pool, that is, decentralized proxy mining. In order to ensure users’ mining income, such a machine gun pool is almost like a ruthless iron hand digging and selling every day, and almost no mining projects can raise their heads under such iron claws. Perhaps it should be said that crv has not returned to zero in the face of several months of relentless selling pressure, which is considered awesome. In the past two months, one is crv and the other is uni. Most of the sky. Data: The total lock-up volume of DeFi has dropped by nearly 40% from the April high point: According to news on May 31, according to the data of the masters on the Okeyun chain, the total lock-up volume of the entire DeFi network has dropped from April 19, 2022 The daily high of $189.51 billion fell to today's $113.77 billion, a drop of 39.9%. At present, the top three locked-up projects in DeFi projects are Lido ($15.8 billion), Maker ($9.2 billion), and Aave ($9.11 billion). [2022/5/31 3:52:32] When it comes to what Curve is, to understand it simply, you can think of it as "uniswap of the stable currency version", that is, in the Curve dex, it is also a kind of AMM automatic market maker trading platform, but the trading pairs inside are mainly targets of comparable value. Now there are two main types, one is the stable currency market, usdt/usdc/dai, etc., and the other is the mapping of btc tokens on ether, wbtc/renbtc. On the homepage of his home, you can directly do swap exchange between any stable currency, and the amount you can exchange will also be displayed in advance. For example, 1000 dai can be exchanged for 1009.08 usdt (including the handling fee) in the picture below: Trading pair , Yield, and trading volume are all displayed at the bottom of the homepage: Analysis | The 40% drop in Canaan Technology’s stock price may be due to the pressure on the price of Bitcoin: According to Bitcoinist news, some analysts said that Canaan Technology (CAN) stock price recently traded at The Nasdaq is down 40%, most likely due to continued pressure on the price of Bitcoin. Jack Yang, a partner at TokenInsight, commented that if the price of Bitcoin continues to fall, Canaan may lose its market position. This is not surprising considering how much the BTC market influences the companies that produce Bitcoin mining equipment. [2019/12/13] The annualized income comes from two parts, one is the same transaction fee as uni, and some stable currency forms such as cDAI are loan equity tokens on compound, which can obtain comp At the same time, the interest income can be obtained from the market-making income in the curve pool. The other part is the LP market-making token incentive of crv. Here, there will be a distinction between the distribution ratio of crv tokens according to whether CRV is locked or not, and different pools. The highest is to get 2.5 times the crv incentive. The main feature of his family is that the transaction friction cost is very low, especially the exchange between large amounts of stable coins, not only compared to uniswap, but sometimes even much smaller than the central exchange, which is also a point that many defi players value curve . Analysis | TOP has dropped 45% from its highest point since its launch: According to Aicoin data, as of 10:00 on April 1, 2019 in Beijing, topnetwork, the first project launched by Huobi Prime, has dropped from a high TOP/ USDT's 0.036679USDT fell to 0.020333USDT, a drop of more than 45%. It is understood that there were more than 130,000 people participating in the IEO of the first phase of the project at that time, and only 3,746 people were robbed. Calculated by individuals, the cumulative maximum transaction limit for the three rounds was 400HT (1000USD). And according to the data, in the past 24 hours, the turnover rate has reached 249.06%. [2019/4/1] Curve uses an algorithm called stableswap, which is similar in principle to Uniswap’s constant product pricing formula. The following figure is a comparison: It is not necessary to fully understand the meaning of this figure or formula here, just It should be known that this is a more suitable exchange pricing algorithm between stablecoins, and large-amount exchanges can also keep price fluctuations as small as possible. The above is a basic aspect of the platform. Let’s talk about crv. Crv can also be regarded as a mining coin. Now 2 million coins are invested in LP market makers every day. But it did not collapse instantly like many small mining coins, but a relatively slow decline, also derived from its token economic model. Market | For the first time in history, bitcoin futures closed below the psychological threshold of an integer of US$6,000, and fell nearly 60% in half a year: CME Bitcoin futures BTC August contract closed down US$200, a drop of about 3.30%, to US$5,865. According to statistics, CME Bitcoin futures set a record low for the front-month contract for four consecutive trading days. This week, it fell by about 5.10%. In June, it fell by 22.47%. . The CBOE Bitcoin futures XBT August contract closed down $170, or more than 2.80%, to $5,897.50. It also set a record low for the CBOE Bitcoin futures front-month contract for three consecutive days. This week, it fell by more than 3.91%. 22.17%, the front-month contract fell by more than 18.54% in the second quarter, and fell by about 59.47% in the first half of the year. [2018/6/30] The current main function of the crv output is governance voting. All project change proposals need to be decided through community voting. Of course, this is also the case for most defi coins. We also believe that the main purpose of this function is to Gather all the setmates to discuss how to pay back the cost. When there are more people discussing, a natural community will be formed. . The crv has a special feature that all holders can vote to determine the crv output distribution of each pool in a certain period of time. Pools with high voting weight will increase the crv income by a certain proportion. The following figure shows the weight change of a pool Table: The price of Bitcoin fell for 4 consecutive days and fell to nearly 10,000 yuan: Financial Associated Press on the 5th, affected by the increase in regulation, the price of Bitcoin was hit hard again today. According to market data from the domestic Bitcoin quotation platform, Bitcoin During the session, it fell below 26,000 yuan, 25,000 yuan, 24,000 yuan, 23,000 yuan, etc., and the lowest price once fell to 22,592.31 yuan, a drop of 14.25%. Since the price of Bitcoin climbed to 32,350 yuan on September 2, reaching the highest price in history, the price of Bitcoin has fallen sharply for 4 consecutive days. According to the current lowest price, the price of Bitcoin has fallen to 9,757.69 yuan within 4 trading days. However, compared to the price of around 7,000 yuan at the beginning of the year, the current price of Bitcoin is still more than 2 times higher. [2017/9/6] The starting point of the next cycle is October 15th. According to the current voting ratio, the minimum crv annualized income of the compound pool will increase from 16.56% to 17.70%, of course, some of them will drop, for example, usdt may drop from 13% to 5%. In addition, the premise of all the above voting is that you need to lock the position, and you can get the voting rights and interests token through the lock-up - veCRV. There is a mechanism here. The longest lock-up is 4 years. If you lock 1000 crv locks for four years, you can get it 1,000 veCRVs are used to participate in voting, which is also the full weight. If you only want to lock for 1 year, then only 250 veCRVs are given, and so on. The picture above shows crv's lock-up volume in recent months and specific lock-up data in the past week. It may also be because of the long lock-up period that only 16.57% of the circulation ratio has been locked up. Generally speaking, those who lock positions are those who are not short of money, and the average lock-up period is 3.23 years. In addition, its lock-up also has platform profit sharing, and the temporary annualized rate is 80%. Locking 1 USD crv for a university cycle is equivalent to providing 140U market-making income on the platform, which is also a driving force for those lock-up investors Bar. The above is the main situation of the Curve platform. The reason why many investors still think that there is still hope for their home is mainly because: 1. There is a demand for exchange between stable coins, and their products are the best in this regard , For large investors, this may be a better channel than CEX, and the lock-up volume and transaction volume on the data side are also pretty good. 2. The community is very dynamic. Various proposals are thrown out every day, and the team has been improving. Recently, they are trying the ZkSync test network, which is a scaling solution to reduce gas fees similar to the second-tier network. 3. The founder is also Russian like V God. There may be a little superstition here. It seems that the Russians have a lot of god coins in their projects. Haha, just kidding. But is it so? In fact, I still have some doubts. Here I only talk about demand. From the perspective of his home page, the main trading volume is concentrated in several mainstream stablecoins dai/usdc/usdt, and the other two to three million a day. The profit is less. Here I checked the records of his exchange transactions: There is a certain amount of inter-platform arbitrage. For example, the operation shown in the figure below: It received 1.2 million usdc flash loans from the dydx platform. It captured the price difference between dai and curve in the pool of dai/usdc/usdt, and made an instant arbitrage. A profit of 279U was obtained, and the gas fee of 88 US dollars was deducted, and the final profit was 191U. This address: 0xa1c8a8a7fd7d084db8d03de0cac8d89cfe4415f0 Those who are interested can go and observe it. Recently, they are basically doing such price difference arbitrage. Of course, the source of profit here should be the impermanent loss of liquidity market makers. So what is the story now? On the one hand, as long as there is a change in the price difference between different platforms and different platforms, there is room for arbitrage. Whether it is between dex or between dex and cex, it will attract all kinds of speculation. Robots, the transactions of these robots seize the assets in the fund pool, but at the same time generate transaction volume. On the other hand, these trading volumes are fed to the market makers in the capital pool, and at the same time, the market makers also hope that the platform's incentives and trading profits can cover impermanent losses. It may have some rigid needs, for example, in order to participate in some mining, it needs to be replaced with dai, usdc, but how big is this demand? It may not be as good as the platform's transaction volume of tens of millions or hundreds of millions. In fact, this is not just curve, all defi is telling such a story, it is not divorced from the core of trading + speculation in essence, it may not die, after all, as long as there is a price difference, someone will come to move bricks, but how much real money can be produced here? As for demand, it may take time. The same is true for many defi platforms including Curve. They are excellent and growing products in the currency circle, but they are a bit awkward in the token mechanism. interest, and one of the benefits of this long-term release is that it can promote a more dispersed chip, but the continuous release without sufficient demand increment is likely to face an endless downward trend of tokens. This has also caused many quilt stories, but can you say that they were born to collect money and cut leeks? It seems not. . Conclusion 1. For crv's real wealth code, one is the arbitrage mentioned above, and the other seems to be a good short target? Unless when his family votes to change the token mechanism, or there are new products. (Only for discussion, not investment advice) 2. The things in the currency circle depend on the data, but it should not be too superficial. The more lock-up volume and trading volume, the better, and we still have to dig deeper..


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