DeFiance Weekly Portfolio Highlights
We plan to shine some light and raise the awareness of many DeFiance portfolio teams/protocols that have exciting developments ongoing via a weekly highlights thread. Here to the inaugural series!
A thread 🧵
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1/ Balancer ($BAL)
Balancer is an AMM that allows multiple assets in different weights in a single pool.
Think Uni V2 with:
- 2 or more assets
- weight options like 80/20 (vs 50/50)
- tighter prices, Curve-style stable swaps.
- More risk flexibility
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2/ Cleaner mechanisms + cheaper fees: BAL stable swaps are more efficient than Curve esp under $1m swaps. We expect this to extend as the pool deepens with more liquidity.
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3/ As BAL uses a single vault, any asymmetric pools contribute to the overall DEX liquidity. This means other stablecoins deposits will deepen the liquidity efficiency too.
A more in-depth article on how Balancer single vault model works:
insights.deribit.com/market-…
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4/ veBal a game changer?
veBal is the new staking model for Bal tokens. Like Curve, voting power allocates LM to different pools. Teams can lock more tokens for a longer time to gain more voting power and revenue sharing.
Gaps that $veBAL addresses for Balancer 👇
app.balancer.fi/#/vebal
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5/ Unlike Curve where u lock CRV for veCRV, Bal locks BAL/ETH LP tokens for veBal. This creates a better token sink, utility and liquidity for $BAL
TL:DR, veCRV makes CRV more and more illiquid. veBAL solves this problem but using the locked liquidity for pools.
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6/ We see strong market interest in practice: the amount of veBal being locked up is climbing with +60% being locked in just 1mth. Thats ~4m BAL (10% of cirr supply) locked for ~10mths.
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7/ On-chain data: We are also seeing large deposits into the V2 vaults for veBAL ( BAL/ETH LPs) in the past 7days.
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8/ Market Reaction: We see strong buying pressure in recent weeks where BAL/WETH volume spiked to ATH after the veBal announcement.
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10/ Curve war background: Started when CVX competed with YFI (and other stables) for Curve DAO power to give their pools higher rewards. This tension led to a higher CRV price.
We are starting to see such interest in BAL:
The Curve Wars.
If you're interested in learning about how the battlefield has dramatically changed, read this:
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11/ Push factors: With the start of Curve 4 pool, smaller stable coins may feel alienated and unable to compete for yield. Smart game plan is to divert resources to stable BAL pools for visibility/yields.
x.com/staderlabs/status/1513…
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12/ As a matter of fact, BAL Battles are still early in the “curve war” arc: we are starting to be able to draw some parallels.
In full: every.to/almanack/curve-wars
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13/ “Convex” forks are just starting: Aura Finance forum proposal by maki
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14/ Voting incentives and bribes have started: @QiDaoProtocol and @redactedcartel hidden hand are already live
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15/ And compete they will - other DAOs are also getting ready to war
mStable proposal to upgrade their LPs to participate in veBal voting for more rewards
forum.mstable.org/t/rfc-stak…
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16/ We are still early - Some DAOs like $FEI have moved to escrow more BAL early for the voting power
The Tribe just vote escrowed a shit ton of $BAL
Very soon, a massive amount of $BAL rewards will be directed to a boosted 3pool which sends $FEI, $DAI, and $LUSD back to Fuse pool 8
💵 $FEI demand
📈 @RariCapital TVL
🔁 More veBAL
🤝 Stronger relationship with @BalancerLabs
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19/ Now the larger Curve players like $UST, $DAI and $FRAX have not entered BAL wars yet.
Since veBAL started, we have seen neg token emission for 1 mth: BAL buybacks for veBAL staking is larger than daily emissions. This reduction is equal to ~64 days of regular BAL emission
May 2, 2022 · 10:44 AM UTC
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Fin/ @BalancerLabs veBAL is the catalyst for BAL battles - and will kickstart the $BAL flywheel.
various DAOs and projects are starting to show signs of interest.
We expect this to boil over with the start of @CurveFinance 4 pools - as the dynamics vs diff stables change.
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