Weekly Gauge #7: Two Years of Gauge
Curve Week 105
The Curve gauge is two years old!
The growth of the gauge has been wild, to say the least.
It first began with an anon deploying the code. Then, it grew with the Yearn dominance narrative and Stake’s counter-attack, as yield aggregators were frothing on the cash machine that Curve was becoming. And they were right. To this day, Curve has redistributed over 100,000,000$ to veCRV holders.
Convex shook up the conflict between yield aggregators by creating a strong flywheel which enabled them to capture over half of the veCRV. Essentially they attracted CRV with CVX and higher revenues which were obtained by creating the most competitive yield opportunities for Curve LPs thanks to the growing boost they were able to provide.
The prominence of Convex was solidified with the explosion of “bribes”. This misnomer was the realization that because of governance arbitrage, it would often be more profitable to pay capital allocators (veCRV holders) to direct emissions to their pools instead of directly paying mercenary capital providers.
(PS: Quest has become the most efficient platform to play on this governance arbitrage)
Rules of the bribing game for DAOs is simple: stay under de $CRV / vote ratio
A swath of other projects looking to optimize their tokenomics have started to implement a similar veToken model because the locking system allows them to exclude holders who were not ready to put skin on the game from governance and rewards.
With barely a third of the whole supply circulating (or locked) the game is still wide open. Furthermore, the announcement of crvUSD and the growing revenue show that CRV distribution won’t be necessary for long to create a sustainable flywheel. We look forward to seeing how the gauge will be so riveting.
Balancer Week 18
As previously mentioned, Balancer bribing games are saturated by ecosystem bribes from Balancer and Aura. This is done by design, to attract more veBAL lockers with high bribe APRs. Interestingly enough, these bribes are not weekly, but bi-weekly.
This means that every two weeks, the bribes look normal, and this should push users to spread their votes towards more of the non-ecosystem bribes. However, because you can only vote every 10 days, sophisticated investors are starting to align and vote more often on the Aura voting week (every 14 days).
This means that as a DAO you should try to begin incentive campaigns on Aura off weeks for efficiency purposes, as you will have less competing incentives available over the week.
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.