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!
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.
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.
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.
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.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
Optimism (✨🔴_🔴✨) @optimismPBCOn 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.
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✨ 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
ARCx ノ @arcxmoneyNear: 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...
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.
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.
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.
Just when you thought there were enough politics in the Curve wars, we have a new set of players entering.
