Original source: One-sided Crypto

This article attempts to simply understand Redacted Cartel on the basis of Curve War, understanding Redacted Cartel as an extension platform of Curve War's Bribe, serving as Bribe's Marketplace, which is used to compete for more voting rights, and then compete for higher liquidity.

Curve War

The understanding from Curve War is usually relatively simple. Before introducing this, we need to have a general understanding of what Curve War is?

The essence of Curve War is to compete for Curve's liquidity. Higher liquidity is definitely better for the project. For example, if UST wants to expand its ecosystem, better liquidity is definitely the first step, and having a higher TVL pool in Curve is one of the important signs. So projects like UST and FRAX will frantically want their coins to have higher liquidity in Curve's pool.

The easiest way to provide higher liquidity is definitely to provide it yourself, but obviously the cost of this is very high. For example, UST not only needs a large amount of UST, but also requires a large number of other stablecoins such as USDC/USDT to form a pool. So in fact the best way is to attract others to provide liquidity. The way various external agreements attract liquidity and the resulting conflicts are the so-called Curve War.

Money always goes where the returns are highest. Curve's mechanism setting leads to the number of CRV voting rights owned, which can determine the income of different pools in Curve. At this time, the more explicit Curve War refers to the competition for CRV voting rights. There are two ways to obtain CRV voting rights, one is to directly purchase more CRV. The second is to "bribe" others to vote for themselves, and only buy CRV's voting rights.

In fact, the cost of purchasing CRV directly is much higher. Therefore, different project parties are more inclined to "bribery" to achieve their goals by purchasing the voting rights of CRV instead of owning CRV itself, which is a more economical way.

At this point, the more defined scope of Curve War is the "war" in which different projects purchase CRV voting rights.

Convex War

Interestingly, the projects involved in Curve War seem to be centered around Convex rather than Curve itself. Why?

The reason is simple, because a large part of CRV's voting power is controlled by Convex. In fact, Convex controls a very large portion of CRV, which in turn controls its voting and earning rights. But other protocols are not so concerned with revenue rights, but only with voting rights.

This is equivalent to the general manager handing over most of the power to the secretary, so the briber is essentially bribing the general manager, but most of the power has actually been transferred to the secretary, so the target of bribery at this time becomes secretary.

Before handing it over to this secretary, there were actually many secretaries competing for the power of the general manager, and one of them won in the end. And Convex is the winning secretary. As for the specific reasons why Convex can win, this article will not describe too much.

After reading this, you should be able to understand:

1. For higher liquidity, different protocols need to compete for voting rights on Curve to attract others to provide TVL, because it is cheaper than providing TVL themselves

2. The way to compete for voting rights has shifted from buying CRV directly to "bribing" CRV holders and only buying voting rights, because it is also more cost-effective

3. Since a very large part of CRV has been controlled by Convex, the main battlefield of the "war" is on Convex

But wait, Convex is not the end either.

Now that Curve War has evolved into Convex War, this means that the "Curve voting rights" held in Convex have been transferred to Convex's own Token: CVX. As a result, users who have pledged CVX on Convex can vote on the Convex platform to determine the amount of rewards for the liquidity pools on the Curve platform, thereby affecting the liquidity of different pools on the Curve platform.

But there is another problem with voting: a user does not actually know which pool to vote for, nor does he know which pool has the highest returns, or the process of voting + receiving voting rewards is too complicated. In order to solve such problems and help users maximize their voting income, a new so-called "voting aggregator" has emerged.

Redacted Cartel

This article is about Redacted Cartel, and it's a good time to make an appearance. What Redacted Carted does is just such a vote aggregator.

Since there are many concepts, let's do a small Recap again:

1. Various pools on Curve compete with each other for liquidity

2. Convex "acts" as the pool aggregator of Curve, controlling the voting rights of a large number of CRV

3. Convex's coin CVX to be able to command CRV

4. The Curve War morphs into a voting scramble against CVX

5. The voting process is user-unfriendly, and voting aggregators appear

6. Redacted Cartel is such an aggregator, except that Convex is just one of them. In the future, it will support more similar projects and help more projects and users in need to achieve voting optimization

In order to have the voting rights of Convex, Redacted Cartel needs to have a large amount of CVX or CRV (CRV can be directly pledged to Convex) just like Convex controls Curve. If Redacted Cartel wants to support the voting of other protocols, then it also needs a large number of governance tokens of other protocols. How to obtain a large number of these Tokens has become the core issue, because only a large number can have an impact on the project being governed.

The way Redacted Cartel adopts is to fork the Bonding mechanism of OHM. Users purchase Redacted Cartel's native Token BTRFLY through a discount, and the process is the same as that of OHM. The Tokens currently accepted in the Bonding process include TOKE, ETH, FXS, CVX, CRV and BTRFLY-OHM LP. Obviously, the supported Tokens also indicate the protocols that Redacted Cartel's Bribe aggregator will support in the future.

So to summarize the above content, let's look back at what Redacted is.

Redacted is a Fork of OHM, and its native token is BTRFLY. It combines the mechanisms of OHM and Convex, and is committed to building a trading market with governance/voting/bribery as a target. Redacted is an extension of Convex War. At the same time, it does not only serve Convex, but also plans to serve other projects with similar mechanisms.

If you want to use more fashionable words, DeFi 2.0 is a liquidity service solution Liquidity as a Service, LaaS, then Redacted and similar projects are a voting service solution Vote as a Service, VaaS.

Currently Redacted's Treasury has a total of about 114 million US dollars worth of assets.

Among them, CVX and CRV accounted for more than half, and the number of CVX exceeded 1 million. For comparison, Frax and Terra are currently the two largest holders of CVX, holding a total of about 3.65 million CVX, and Redacted ranks third. So from this perspective, Redacted has been able to have a certain impact on the results of Convex.

After Redacted acquires Votemak (where Tokemak governance votes), it will integrate and re-launch Hidden Hand, a Bribe trading market. Hidden Hand will be the core of VaaS, while supporting Redacted to expand other protocols besides Convex.

Specific process:

1. Users entrust assets with voting rights to Hidden Hand

2. Hidden Hand bids to sell voting rights to an externally required agreement, and in return Hidden Hand receives Bribe rewards

3. Hidden Hand redistributes rewards, one part to users, the other part to Redacted Treasury, and then distributed to BTRFLY holders

Source: Redacted Cartel

All the voting process and the maximization of voting revenue are handed over to Hidden Hand, which is completed in the second step above. At the same time, BTRFLY holders can obtain the power to command Hidden Hand after staking BTRFLY.

I don't know if you have fully understood from Curve War to Convex War, and then to Redacted (and Redacted War that may appear in the future).

Using the previous example of the secretary to continue explaining, the secretary has gained the trust of the general manager through his own ability, and thus obtained the power entrusted by the general manager. Secretary 2 also won the trust of Secretary 1 because he solved some problems, and thus obtained the power of second entrustment from Secretary 1. Secretary three...

image description

Source: @RedactedCartel Tweet 8th April 2022

There are many places that should be involved but have not been involved

This article just tries to introduce what Redacted is in a relatively simple way. It has to involve a lot of content about Curve War and involves multiple projects. I hope it can help you understand Redacted and what Curve War is about. There are so many things that have been ignored in this article.

For example, Curve itself has a Bribe market, where users can directly vote for different pools of Curve.

image description

Source: llama.airforce

Voting on Votium takes place every two weeks. In the latest vote, the total amount of Bribe spent by the external agreement reached $21.37m. The average price of a single ticket (that is, the price of purchasing a vlCVX two-week voting right) reached $0.56. Among them, Frax and Terra spent the most, at $7.76m and $5.07m respectively.

The above is to understand Redacted from the perspective of Curve, and another perspective is from the perspective of OHM. Replace the underlying income logic of OHM with Bribe income. The same way of understanding, such as FloorDAO, also uses OHM's Bonding mechanism, and then the underlying income is to provide liquidity to NFT assets to obtain income.

The essence of the Curve War mentioned above is to compete for higher liquidity from the perspective of external agreements. The purpose of ordinary users participating in Convex is definitely to have higher returns than direct Staking on Curve.

In addition, the income of Curve is not only determined by the amount of votes, but also considers the TVL of the pool itself. The higher the TVL of the pool itself, the higher the rewards that can be obtained.

The 4pool launched by Terra some time ago is aimed at 3pool, which may be the main battlefield for liquidity in the future. If you spend a lot of money, it is not impossible to seize part of 3pool's liquidity, or even surpass it. I don't know if DAI will fight back, and will also take out money to buy voting rights and reward 3pool.

In addition, Do Kwon said on Twitter about 10 hours before writing this article that once Terra's own Bridge is ready, Curve may not be used in the future, which may be a big negative for Curve and Convex.

Will Bribe Marketplace be a Big Thing? If so, how will the current competitive landscape for these projects change in the future? From Curve to Redacted, and even to the next protocol commanding Redacted, is there any point in going so infinitely?

In crypto, don't under-estimate everything.

In crypto, don't over-estimate everything.

A brief explanation of the various letters:

CRV - native token of Curve platform

veCRV - Credentials locked by Curve, with revenue and governance rights

CVX - the native token of the Convex platform

cvxCRV - the certificate obtained by the user after staking CRV to Convex. In fact, Convex still replaces the CRV pledge with veCRV, but the certificate for the user is cvxCRV

vlCVX - Token obtained after staking CVX

BTRFLY - Redacted's native Token, which can be obtained through Bonding

xBTRFLY - Token obtained after BTRFLY stake

wxBTRFLY - wrapped version of xBTRFLY, can be used as collateral for other protocols

pBTRFLY - Token prepared for the team, the future team can exchange pBTRFLY for BTRFLY at a low price

glBTRFLY - Governance tokens for Hidden Hand after Staking

blBTRFLY - Earning certificate for Hidden Hand after Staking

3pool - Curve's most famous pool: USDT/USDC/DAI

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