DeFi - going bankless
- Thread starter Sprout
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Forgive me for spamming the thread with $core stuff, but this is DeFi and I don't know where else to share it, I don't think it makes sense to create a new thread.
Background, $core is a new DeFi token with forever locked liquidity that guarantees a price floor. During the first genesis event when all 10K $core tokens were issued the TVL (total value locked) of all the Eth deposited forever guaranteed a price floor that $core will never go below. Currently, that floor is 1.07 Eth and can only go higher as more people enter the Eth/Core LP
Today, the $core team announced a 2nd LGE that involves wBtc. I think this is big if the LGE is successful in getting a lot of wbtc to be deposited and thus all the value (TVL) locked forever, adding to a higher price floor for $core.
There's a lot of stuff to follow here and of course my interpretations could be incorrect, so better to DYOR.
The analogy I can make in TradFi is when the $ used to be backed by Gold. If the USG wanted to issue a trillion $, they needed an equivalent amount of valuable gold in the vaults. During the 1st LGE, deposited Eth was forever locked to the 10K $core tokens. Unlike in the TradFi scenario, there can never be more than 10K $core, so if adding to the LP to earn the yields, market buying and essentially depositing more Eth (value) to the ecosystem was the only way, raising the price floor. Now the 2nd LGE involves wbtc (which is really btc wrapped in the Ethereum ecosystem) and the deposited value whatever that may be on 10/16/2020 will market buy $core tokens and enter the ecosystem raising the price floor of $core. Just to be clear, these are price floors but $core is trading at much higher price than the floor so there's plenty of room to lose money
What's interesting is that outside of the people involved in the project, I don't think many are aware of the implications of this $core project experiment. This is a blackhole sucking value from other tokens (Eth and soon to be btc in the form of wbtc) and locking them in synergy with the $core tokens. Wbtc is an interesting addition as btc maxis probably will be talking crap about why did people allow their precious bitcoins to be "lost" forever in this "scam" project, lol. Anyone can purchase wbtc on the Ethereum network so power of DeFi.
I guess a thought experiment to understand what is at stake here, what if btc goes to $1M? Yes, that is correct, $core value will shoot up being that the LP pair will rebalance purchase as much $core as necessary to get the value in sync. How about if $core was to go up in value to $1M, well it will have to purchase a lot of Eth and a lot of wbtc's but the effect on both won't be as pronounced as both Eth and btc's have a lot of more coins than $core in circulation.
The 2nd LGE of $core
https://cvault.finance/
Background, $core is a new DeFi token with forever locked liquidity that guarantees a price floor. During the first genesis event when all 10K $core tokens were issued the TVL (total value locked) of all the Eth deposited forever guaranteed a price floor that $core will never go below. Currently, that floor is 1.07 Eth and can only go higher as more people enter the Eth/Core LP
Today, the $core team announced a 2nd LGE that involves wBtc. I think this is big if the LGE is successful in getting a lot of wbtc to be deposited and thus all the value (TVL) locked forever, adding to a higher price floor for $core.
There's a lot of stuff to follow here and of course my interpretations could be incorrect, so better to DYOR.
The analogy I can make in TradFi is when the $ used to be backed by Gold. If the USG wanted to issue a trillion $, they needed an equivalent amount of valuable gold in the vaults. During the 1st LGE, deposited Eth was forever locked to the 10K $core tokens. Unlike in the TradFi scenario, there can never be more than 10K $core, so if adding to the LP to earn the yields, market buying and essentially depositing more Eth (value) to the ecosystem was the only way, raising the price floor. Now the 2nd LGE involves wbtc (which is really btc wrapped in the Ethereum ecosystem) and the deposited value whatever that may be on 10/16/2020 will market buy $core tokens and enter the ecosystem raising the price floor of $core. Just to be clear, these are price floors but $core is trading at much higher price than the floor so there's plenty of room to lose money
What's interesting is that outside of the people involved in the project, I don't think many are aware of the implications of this $core project experiment. This is a blackhole sucking value from other tokens (Eth and soon to be btc in the form of wbtc) and locking them in synergy with the $core tokens. Wbtc is an interesting addition as btc maxis probably will be talking crap about why did people allow their precious bitcoins to be "lost" forever in this "scam" project, lol. Anyone can purchase wbtc on the Ethereum network so power of DeFi.
I guess a thought experiment to understand what is at stake here, what if btc goes to $1M? Yes, that is correct, $core value will shoot up being that the LP pair will rebalance purchase as much $core as necessary to get the value in sync. How about if $core was to go up in value to $1M, well it will have to purchase a lot of Eth and a lot of wbtc's but the effect on both won't be as pronounced as both Eth and btc's have a lot of more coins than $core in circulation.
The 2nd LGE of $core
https://cvault.finance/
I'm enjoying your posts, they are right on-topic and welcomed. I don't have much to add atm.
The current structural dilemma has to do with exchanges now listing projects when they go/about-to-go parabolic with derivative products, ie. FTX, Binance
I could be mistaken, it's my interpretation since they are not settled in crypto, it distorts the supply/demand mechanism that you describe with CORE.
I don't understand fully how one can get value out once they put value in with CORE.
Yea, I was in Cream discord after it just got listed on FTX and one of the moderators there was pointing out that the Cream futures were severely discounting the price (i think something like $180 for 1225 futures - Dec futures?) when Cream was over $250. He was openly saying he was short Cream and if anyone was bullish on Cream to go on FTX and go long on those futures. Anyway, being the idiot that I am and not versed on those futures, I rode Cream down all the way to $45 (last week) before selling since they ended the rewards (yields) for staking, I switched the capital to Core LP's instead (currently 177% APY, was over 200% at the time), yolo
To the point above, FTX, Binance, etc, massive short positions on YFI and other DeFi tokens with the "big well-funded whales, even pointing to SBF and bluekirby and the cohorts all involved in the manipulation that siphoned massive amount of investor $ into their pockets. too much psyops going on in the space, but the charts don't lie, there have been massive amount of $ that were lost based on DeFi percentage losses, and when they pump them again on the next cycle, they will once again suck all that value into their pockets. I've been lucky, got ahead on some of the moves and cashed out before they crashed, but feel bad for others. My losses on Cream was the biggest but made more on other projects.
Back to $core, everything is settled in crypto and nothing else. Bluekirby tweeted to the effect that $core is scam, and that actually makes me feel good about investing in $core, it was mentioned on discord, and one of the core team members pointed out those guys didn't get in as the LGE was fair distribution, deposit Eth, you get Uniswap LP's core/eth. There was no discount and project was anon, so those guys not having an advantage or maybe they did participate but not enough so now trying to fud to buy more, again, too much psyops in the space, and core team being anon just puts the game at extreme levels.
Core is a difficult one to explain and I know I was rambling on previous posts as I assumed this is DeFi thread, everyone has a background in DeFi and yield farming and all, but it's a YFI replacement. We know how YFI got started, which is the same for all YFI clones (i believe) and pretty much all other yield-farming tokens (i.e sushi). If you wanted to earn, these tokens, you become an automated market maker in a Uniswap liquidity pool (LP) and the Uni tokens you stake as proof of your skin in the game on the platform, the platform then give you rewards, i.e. YFI tokens. Whales being whales, put millions of $ to yield farm these tokens, remember YAM, $500M overnight TVL (total value locked), and then the bug, but $500M was not lost on YAM, they just simply unstaked those tokens, and removed Uniswap liquidity and got back their Eth/sUsd or whatever the pair was used in the LP's.
How is Core a replacement of YFI? It's a paradigm shift on yield farming the tokens. During the first LGE (Liquidity Generation Event), you deposited Eth and the 10,000 Core tokens will be paired with those Eth on Uniswap. I was not part of the first LGE, but to make it simple, let's say they collected 10,000 Eth so 1-1 ratio and let's say Eth is $350 Each, so TVL was $3.5M. Here's the thing, all 10,000 cores and all 10,000 Eth were put on Uniswap liquidity pool and you got those tokens, say 10,000 LP's in proportion to the contribution, but the big twist is that the smart contract protocol, locked those LP's forever, so no one can remove liquidity, you can try and it will fail, you cannot get the core/eth back from those LP tokens. The only way to get core tokens is to buy them from the uniswap exchange or stake the LP tokens you received and earn yields from the cvault platform. Where are the yields coming from if all 10,000 cores have been issued? The fees generated by the uniswap LP's, one of the core smart contracts (on the audit picture it looks to me like FeeApprover.sol solidity is the programming language of Ethereum) uses it to market buy core on the uniswap exchange and the core purchased is given as rewards/yields to the LP stakers on cvault. Also, when you transfer core from one address to another wallet address, there is a 1% fee which is again given to the LP stakers on cvault, so if you transfer 1 core, you get .99 core on the receiving address.
That's a lot of stuff on the previous paragraph. TL;DR, but 1 takeaway is that core cannot go to $0 based on the liquidity that is locked. If the price floor (there's a math somewhere) is 1.07 eth, then if Eth goes to $10K each, Core will be worth more than $10K possibly a lot more. Now the 2nd LGE will do the exact same thing, which is to lock wbtc this time, and whatever the TVL on the 2nd LGE, will determine the price floor in wbtc terms/ratio and this is accretive to the first LGE TVL, so both price floors add up. There's also a reverse scenario if Eth or wbtc goes to $0, then core will get arbed out to $0, hence the synergies between core and the paired tokens mentioned in the core team announcement.
A lot of things to take in, but core is playing 4D chess DeFi experiment. It's less than 2 weeks old, currently. This wbtc LGE announcement and once it's out could play out some perpetual motion shit between the 2 LP's, maybe, maybe not depending on volatility of the core price. If core is "cheap" in terms of eth/core ratio, smart players will come in and buy core using eth and sell for wbtc on the wbtc/core pair. Crypto being volatile, this could go back and forth seesawing, or maybe volatility dies on core, who knows, but imagine all the fees generated on those trade volumes and the LP stakers getting all those juicy rewards (yields)?
So, what happens when they announce the next LGE pair, say it's Dai? now, the arb situation is getting out of hand between the LP token pairs with core. what happens when core gets to the 10 LP token pairs? They mentioned vaults in future plans, possibly for the the actual core tokens and stuff.
And through all of these, there are only 1/3 the supply of YFI, which is 10K core tokens that will never increase. And people may have died already or lost their private keys. Insane scarcity. How's YFI trying to create value again for their tokens? DAO? Governance? Core talks about governance, too, but core is only on the 2nd week. The focus is on the next LGE wbtc/core pair.
I mentioned the 1.07 Eth as price floor for core based on someone's formula but someone pointed on Discord that you can easily verify the price floor and it's much higher. You do this by by putting the number of core tokens you want to sell on uniswap and it will spit out the price impact and I'm seeing $1,207 right now as the price per core token (putting 7,000 cores for sell since there are a little over 3K coins on the uniswap liquidity pool per uniswap). There's a formula for that too, but my iq is not high enough to understand it.
I'm not sure I answered your very important question.
Value is a relative term. For example, bitcoin is over $11K per coin, how is it generating that value? through scarcity, as a SoV, as a digital gold, as a secure form of cryptographic digital asset that has massive amount of computing pwer behind it worldwide to secure the network from attacks, such as double spend, or bitcoin forgeries (think fake gold in the supplies, lol, but no fake btc's in the supplies), etc.
Tesla is over $400 per share, how is it generating that value? through business operations, capital utilization, operating profits, etc. They are able to use that Tesla share value as "currency" to raise more capital from "investors" through issuance of more shares and dilution of shareholder value, how nice. I put quotes since I have my views on QE, Fed Trillion$ going into the stock market.
Core is trading at about $4,000 per token right now, how is it generating that value? Same as bitcoin, scarcity, network security of cryptographic digital asset, but this time utilizing the Ethereum network mining power, etc, But I mentioned Tesla? Yes, because it also utilized something similar to the stock market, $core "sucked" value from Ethereum owners/investors who deposited in the first LGE and jump-started the value of core tokens and locked the Ethereum value so those who participated and deposited their Eth cannot get them back, pretty cool, huh. Anyone using the cvault and adding to the core/eth liquidity pool using a 1-click button is adding to that value. They get yields in returns. Kinda like a CD in the bank except the bank will never give you back your deposited capital, but they will give you a very high APY forever or as long as core still exists.
Investing in $core tokens, guarantees a price floor, and ownership on a DeFi ecosystem, with yields for core LP participants, and capital appreciation (hopefully) for core token owners. This core project is less than 2 weeks, and already a plan to "suck" value from wbtc has been announced. Hence the blackhole description I used in a previous post.
[PS: The core LP tokens are tradeable on balancer exchange, so when you no longer want to be a core LP yield farmer, you can sell them there, or if you're a sophisticated DeFi crypto person, you'll get the LP's there for much cheaper than using the 1-click button on the cvault website, keep on the downlow, lol, as this doesn't add to the value of the core network buying and selling existing LP's]
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ERC-95: A New Standard
Excited for the 2nd LGE and eventually, 2nd core-pair Uniswap Liquidity Pool. Eth and btc can have good volatility and a lot of times in opposite direction, and imo, arb opportunities will often occur.
Incidentally, erc-95 is (most likely) a play on Windows 95. The core team has a sense of humor, putting classic MS Windows games Minesweeper and Solitaire, completely playable, on their website https://cvault.finance/ Someone on Discord mentioned they are probably Microsoft Engineers (or ex) then someone else said Google Engineer on leave. Who knows. Anonymous devs. It's the best setup, you expect to get scammed any minute and get disappointed each passing day, until.... rugpull, baby.
Excited for the 2nd LGE and eventually, 2nd core-pair Uniswap Liquidity Pool. Eth and btc can have good volatility and a lot of times in opposite direction, and imo, arb opportunities will often occur.
Incidentally, erc-95 is (most likely) a play on Windows 95. The core team has a sense of humor, putting classic MS Windows games Minesweeper and Solitaire, completely playable, on their website https://cvault.finance/ Someone on Discord mentioned they are probably Microsoft Engineers (or ex) then someone else said Google Engineer on leave. Who knows. Anonymous devs. It's the best setup, you expect to get scammed any minute and get disappointed each passing day, until.... rugpull, baby.