Narrative Alpha Part 1: Optimism, $USN, Curve War Entrants, Incentives Backlash, Exploits & More

That’s quite a lot to unpack, read more to understand the recent crazes.

The past week has been very full on with all sorts of twists and turns in the entire ecosystem. I’ve been enjoying reading and watching the action play out in real-time. The key themes are:

• Optimism

• Airdrops

• Incentive schemes & token emissions

• Stablecoins

• Near & $USN

• Curve Wars

• Bearish Narratives

• Regulation

• Valuations

Quite the broad scope indeed. That being said, let’s jump into it!

1. For those of you that are somewhat new, Optimism started off as an Ethereum working group called Plasma Group! This was before zero knowledge proofs for scaling were even being mentioned or right at the time. Seeing the evolution of people and teams over the years is pretty magical and how we get some of the best talent focusing on the hardest problems. Learning crypto history and the people behind it is crucial to developing a deep understanding of this industry.

   Eva Beylin @evabeylin

   if you remember, before @optimismPBC was OP it was Plasma Group, before that it was Plasma Cash & before that it was L2 Implementer's Calls it takes a certain dedication & intellectual honesty to constantly innovate for ethereum's best interests feeling optimistic ✨🔴_🔴✨

2. One of the coolest parts from the Optimism airdrop announcement was the focus on the multi-round airdrop to have a sustained incentive. In my view this is going to become standard within the industry over the next few months and years as one-time airdrops become an archaic way of distributing tokens. As soon as you can attribute user behaviours to profitable activities to a network is when we unlock some powerful levers at scale. I’ll discuss this in more detail later.

   James Ross @JRossTreacher

   1/ Thoughts on the @optimismPBC $op token airdrop • airdrop announcement b4 token release becoming standard • a good distribution to keep target user Eth heads happy • multiplier for power users is v cool • no detail on using token to fuel user acquisition 🧵thread

3. The other thoughtful part from the Optimism token announcement was the way they’ve setup their governance process. It very much emulates a lot of what we see in existing democracies and has some cool checks and balances. I like this approach because we’re not reinventing the wheel and actually learning from those before us. Keen to see how this plays out in reality.

   Paul Razvan Berg @PaulRBerg

   By creating a Token House and a Citizens' House, @optimismPBC is effectively bringing the good old principle of separation of powers in DeFi. If this trend will continue, we might someday see DAOs set up Judiciary Houses to settle disputes and disagreements between users.

   

   Optimism (✨🔴_🔴✨) @optimismPBC

   The Optimism Collective will be governed co-equally by two houses: 🏛 The Citizens’ House 💰 The Token House Together, they will drive rapid, SUSTAINABLE growth in Optimism, Ethereum, and the new internet. https://t.co/6kaTkTklXa

4. On the vein of multi-round airdrops, at ARCx we recently helped Juicebox with something similar by doing a specific airdrop based on past on-chain actions with the results of the first airdrop to power a subsequent one soon. To me it feels increasingly clear that creating much more intelligent incentive schemes is critical for new and existing tokens if they want to fuel targeted, profitable growth. If you’re thinking about this more, reach out to me.

   Liam @liamellul

   Continuous airdrops using wallet reputation like @optimismPBC's $OP distribution will become the norm. 🧠 Read out how we used wallet reputation to help @juiceboxETH decentralize $JBX voting power to users who value it most. 👇 s/o @filipv_ @ZeughFromCanu @Mr__Goldstein

   

   ARCx ノ @arcxmoney

   ✨ Airdrop analysis complete! ✨ We finished doing our analysis on the @juiceboxETH airdrop we powered a few weeks ago... The results are 2x - 6x better than any airdrop done till date 😯 Learn more below 👇 https://t.co/Xsb5uebFiz

5. Near: the new L1 with their own stablecoin. It seems like this is going to be the next bandwagon for every main chain in town. USN has gotten quite a lot of buzz but something about them not being able to hit the same 20% figures as Terra probably makes it less appealing. However, that being said it sounds like the 20% will need to come down eventually since those reserves are being sucked dry. Thinking through this the Near folks probably figured this out and decided to start lower to maintain their time in the game knowing Terra will need to reduce down to their levels...

   Decentral Bank @DcntrlBank

   Meet $USN, the first NEAR-native stablecoin by Decentral Bank! Starting today, users can mint $USN using $NEAR through the NEAR web wallet (wallet.near.org). Users can also swap between $USN and $USDT on @finance_ref's StableSwap.

   

6. Oh that’s right, did I mention that Tron also is going to be creating their own stablecoin with a 30% APY? The amount of free money for people who want to extract yield is going to be insanely high over the next few years until people realise what a waste of money it all is since users are highly mercenary and will keep jumping to the next juicy thing to extract yield out of lol.

   Route 2 FI @Route2FI

   I'm not apeing in now. I want to see how this plays out. I will follow $USN closely though. And soon there will be another competitor in $USDD (Tron) that promises 30% APY. Exciting times for stablecoinooors. 5/6

7. A new player dips their toes into the Curve wars... welcome MakerDAO? This proposal has two pathways: one is a low-cost way and the other is MakerDAO eventually going down the path of acquiring CRV/CVX tokens. I’m very fascinated to see how this goes down since increasingly the aggression from MakerDAO is picking up. Basepool could very much eat up 4Pool’s intended share given how much $ Maker can pump into it through its direct deposit module.

   monetsupply.eth @MonetSupply

   Introducing the Basepool: a proposed partnership between @MakerDAO and @CurveFinance that offers unrivaled capital efficiency for stablecoin liquidity pools Read the draft proposal here (split into two options, A & B): docs.google.com/document/d/1Yy… TL;DRs in the tread below 1/19

   

   docs.google.comBasepool Curve Pool and Maker Partnership Proposal (A/B versions)Proposal Version A Summary This proposal would create a new pool (tentatively named Basepool) including DAI, USDC, USDP, and GUSD. MakerDAO would commit to onboarding the Basepool as a collateral type with high maximum leverage and low stability fees, allowing LPs to efficiently increase pool l...

8. Just when you thought there were enough politics in the Curve wars, we have a new set of players entering.