When Convex & Yearn Compete, Curve Wins

JUN 28, 2021 • 4 Min Read

Disclosure: Delphi Ventures has invested in UNI and YFI. Members of our team also hold CRV. This statement is intended to disclose any conflict of interest and should not be misconstrued as a recommendation to purchase any token. This content is for informational purposes only, and you should not make decisions based solely on it. This is not investment advice.

Key Takeaways

  • By the end of August, if the post-Convex veCRV lock rate sustains, more CRV will be getting locked up in governance than is being released into circulation each day.

  • Even in the pre-Convex period, Curve had a healthy lock rate that would eventually fall in line with LP reward issuance by the end of July 2021 and total issuance by the end of August 2022. The emergence of Convex on the scene has accelerated this development.

  • Curve is one of the few Defi protocols that has earnings (i.e. protocol revenue) with a healthy trailing 30d P/E of ~39.

  • Uniswap v3 has eaten into Curve’s stable swap market share. Month to date, Uniswap v3 has facilitated ~40% of all stable swap volume. However, Curve is fighting back with the development of Curve v2, which aims to penetrate the volatile-asset DEX market

  • Overall, while Yearn and Convex battle it out for veCRV supremacy, Curve is the ultimate winner. This is because an increase in sustained sources of demand for veCRV translates to net less CRV selling and potentially more liquidity directed towards its pools.

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