Weekly Gauge #6: Whitelist Privilege
Curve Week 104
With the celebration of Curve Finance’s 2 year anniversary coming up next week, we wanted to dedicate the next two weeks to a deeper analysis of the evolution of the gauge and its stakeholders.
One very important aspect of veCRV is the fact that smart contracts cannot lock CRV. To enable an EoA to lock they need to be whitelisted by Curve governance.
Historically only three players had a “locker” (smart contract whitelisted for locking CRV):
Yearn, the OG locker with yvCRV, who got whitelisted when the opportunity was created, exactly two years ago;
StakeDAO, followed six months later with an incentivized permal-locker, that has now morphed into the Liquid Lockers;
Convex, the overlord of the Curve ecosystem.The protocol was also the first one paying veCRV holders to vote in their favor.
Until a few weeks ago, almost no one else had asked for a WL. This resulted in a large concentration of veCRV going into these lockers as they offered higher APY or more flexible usage (less locking time, delegation…) than vanilla locking.
Over the past months, six protocols have asked for a WL (Kallisto, Abra, Redacted, Liquidity, Frax & K3eper). This would effectively triple the number of WL DAOs on Curve.
This sudden explosion happened due to multiple factors. One of the key ones was Convex passing a certain dominance threshold (50%+) where they didn’t really have to care anymore about other competing lockers. The compromise allowing the creation of sdCRV showed that new opportunities were afoot.
So, is this any good for Curve in general? Certainly,this will bring a new breath of possibilities in terms of composability and we should expect new products to be built thanks to this (Abracadabra cauldrons for example). However, in general, most have simply stated they wished to lock CRV through DAO contracts).
This is good news for governance activity as it means Curve’s meta-governance is growing!
Now that the silence is broken we can expect more WLs coming our way, more competition in the gauge, more incentives to stay relevant, and more arbitrage opportunities between the pegs of the growing number of wrappers.
Balancer Week 17
veBAL has been struggling to attract more lockers over the past few weeks, despite the obvious value creation and the Core Pool Incentives that are over-saturating the bribe market, making any attempt of bribing outside of Quest unprofitable.
The yields are currently over 100% when adding bribes and veBAL revenue, which should eventually attract some hungry farmers. The growing number of LPs in the 80BAL-20WETH pool seems to confirm this.
Weekly reminder that the best capital efficiency is made of fixed rate, Warden Quest remains the only protocol on the market that offers such a predictable experience with bribe incentives. Now available on Balancer, keep an eye on Paladin’s Twitter account for more updates.