🕵️♀️ [On-chain Sleuth] CRV 🛍
Just wow! Demand from the OGs and some protocols is crazy… So far, Mich bagged (and used it all to repay debt) about ~$44M, getting rid of ~110M CRV.
- Dune board: https://dune.com/spotonchain/crv-founder-sold-crv-via-otc
- Mich debank profile: https://debank.com/profile/0x7a16ff8270133f063aab6c9977183d9e72835428/history
NOTE: SpotOnChain tracks USDT only, hence it shows only $22M. But some sent Frax, some sent USDC… As such, if you look at the total CRV sent though, the amount now is $44M USD. There could be some discrepancies, but anyway it gives a roughly accurate picture.
Look at the post we did in June, overall changes are:
👻 Aave: $63M debt in stables -> $20M repaid now -> $43M debt now
🧙 Abracadabra: $20M debt in stables -> $15M repaid now -> $5M debt now
⚫️ Fraxlend: $16M debt in stables -> $8M repaid now -> $9M debt now
↔️ Inverse: $3M debt in stables -> bigger debt now, $9M 👀
Fraxlend design forced his hand first, so the first OTCs went into repaying it. Then he split between Aave and MIM, favouring MIM despite larger debt in Aave. Inverse is now more indebted in CRV, but that doesn’t seem to be a concern now (?)
1️⃣ Whether it was Black Thursday and systemic or not… A game of musical chairs between the protocols?
First of all… There was nothing systemic here. Liquidity would have shifted elsewhere. There was no risk for DeFi (fk u coindesk, larping snakes). 🖕 Liquidations would have happened, some protocols would have lost, but bad debt wouldn’t be so high. Aave would somehow pay it back with reserves or stkAAVE. Meanwhile, Fraxlend showed the strength of its design without even any external votes. MIM understood the situation and ran to save its users with more proactive counter votes. Good! At the end of the day, protocols have to secure their assets and ensure no bad debt, even if it makes churning one main user as a result. That is, if they are not dishonest…
2️⃣ Governance is fugazi or not. How do we fix it?
Immediately, people started blaming governance. Flexibility=control... Should MIM be able to force the hand that fast? They acted in the interest of their users though. What about Aave V2? There are many questions here, because while many say bad debt would have been limited, don’t rush to make bad decisions (Marc) - you can’t argue that it WAS WEIRD how Gauntlet proposals and everyone else have been ignored. Maybe no malice, maybe no conflict of interest per se - sure, but definitely overlooking the situation. And now they want to buy CRV, at least kudos for making it via a treasury vote and not just deciding to buy (on-chain governance benefits). No diss on Aave here, V3 looks great, but one can’t overlook the debt of $60M+ on a medium-tail asset with worsening liquidity and think it’s ok. Blz don't beat me up ❤️
- Also, made a thread on governance: https://threadreaderapp.com/thread/1687087857859719168.html
- A thread on different models tradeoffs: https://twitter.com/apeir99n/status/1687095911024136192
3️⃣ Founders are evil and rich? Is Mich an evil abuser lol?
Mich didn’t want to sell (majority in any case) and had put them as collateral instead. Now he is forced to sell lower, which one could say was a sifu move - but Mich built much more for the space than the trading shady fker. It might have been an oversight from our in-house-physicist, but it is what it is. Currently, he is taking an L compared to if he sold it before - and that is a fact.
But again: There was nothing systemic here. DeFi is not dead 🤕 Liquidity would have shifted elsewhere. Balancer has bribes. Uniswap has liquidity. Everything was ok from the start if you accept the fall of some and the rise of others. It’s cool to see some OGs come to the rescue, but again - that is NOT an industry rescue, it’s a rescue of their favorite. A choice, not a necessity.
PS: love both Curve and Aave, no diss on either. Simply presenting different sides to the debate. Cheers 🖖
Just wow! Demand from the OGs and some protocols is crazy… So far, Mich bagged (and used it all to repay debt) about ~$44M, getting rid of ~110M CRV.
- Dune board: https://dune.com/spotonchain/crv-founder-sold-crv-via-otc
- Mich debank profile: https://debank.com/profile/0x7a16ff8270133f063aab6c9977183d9e72835428/history
NOTE: SpotOnChain tracks USDT only, hence it shows only $22M. But some sent Frax, some sent USDC… As such, if you look at the total CRV sent though, the amount now is $44M USD. There could be some discrepancies, but anyway it gives a roughly accurate picture.
Look at the post we did in June, overall changes are:
👻 Aave: $63M debt in stables -> $20M repaid now -> $43M debt now
🧙 Abracadabra: $20M debt in stables -> $15M repaid now -> $5M debt now
⚫️ Fraxlend: $16M debt in stables -> $8M repaid now -> $9M debt now
↔️ Inverse: $3M debt in stables -> bigger debt now, $9M 👀
Fraxlend design forced his hand first, so the first OTCs went into repaying it. Then he split between Aave and MIM, favouring MIM despite larger debt in Aave. Inverse is now more indebted in CRV, but that doesn’t seem to be a concern now (?)
1️⃣ Whether it was Black Thursday and systemic or not… A game of musical chairs between the protocols?
First of all… There was nothing systemic here. Liquidity would have shifted elsewhere. There was no risk for DeFi (fk u coindesk, larping snakes). 🖕 Liquidations would have happened, some protocols would have lost, but bad debt wouldn’t be so high. Aave would somehow pay it back with reserves or stkAAVE. Meanwhile, Fraxlend showed the strength of its design without even any external votes. MIM understood the situation and ran to save its users with more proactive counter votes. Good! At the end of the day, protocols have to secure their assets and ensure no bad debt, even if it makes churning one main user as a result. That is, if they are not dishonest…
2️⃣ Governance is fugazi or not. How do we fix it?
Immediately, people started blaming governance. Flexibility=control... Should MIM be able to force the hand that fast? They acted in the interest of their users though. What about Aave V2? There are many questions here, because while many say bad debt would have been limited, don’t rush to make bad decisions (Marc) - you can’t argue that it WAS WEIRD how Gauntlet proposals and everyone else have been ignored. Maybe no malice, maybe no conflict of interest per se - sure, but definitely overlooking the situation. And now they want to buy CRV, at least kudos for making it via a treasury vote and not just deciding to buy (on-chain governance benefits). No diss on Aave here, V3 looks great, but one can’t overlook the debt of $60M+ on a medium-tail asset with worsening liquidity and think it’s ok. Blz don't beat me up ❤️
- Also, made a thread on governance: https://threadreaderapp.com/thread/1687087857859719168.html
- A thread on different models tradeoffs: https://twitter.com/apeir99n/status/1687095911024136192
3️⃣ Founders are evil and rich? Is Mich an evil abuser lol?
Mich didn’t want to sell (majority in any case) and had put them as collateral instead. Now he is forced to sell lower, which one could say was a sifu move - but Mich built much more for the space than the trading shady fker. It might have been an oversight from our in-house-physicist, but it is what it is. Currently, he is taking an L compared to if he sold it before - and that is a fact.
But again: There was nothing systemic here. DeFi is not dead 🤕 Liquidity would have shifted elsewhere. Balancer has bribes. Uniswap has liquidity. Everything was ok from the start if you accept the fall of some and the rise of others. It’s cool to see some OGs come to the rescue, but again - that is NOT an industry rescue, it’s a rescue of their favorite. A choice, not a necessity.
PS: love both Curve and Aave, no diss on either. Simply presenting different sides to the debate. Cheers 🖖