Hey Everyone. I was wondering if someone could help understand the impact that the current Curve issues with Alchemix has, or could potentially have on Yearn (short, medium and/or long term)
I’m just trying to understand what impact, if any, yearn will have from these types of proposals, and if there is a threat to Yearn long term from what is happening. I don’t think there is, but I’d definitely appreciate a distillation from more informed people about what the Curve/Alchemix issue means for Yearn, long term, if anything.
Thanks for your thoughts.
Great reminder to always improve and increase security. Put bounties on bug and search for any weaknesses or loopholes. I don’t see it as a direct issue but again a huge reminder.
It’s only twitter. The devs on both sides don’t think it’s a big deal. Twitter sensationalism as usual. Nothing new.
This has been resolved by Alchemix and an incident report can be found on their forums here.
Yearn has done a great job at remaining neutral, given their deep relationships with both protocols.
Generally, we’re seeing DAOs become more sophisticated at addressing how certain strategies impact their respective protocols - and the early impacts of that are playing out here.
But these are micro changes - from the macro, Yearn’s long-term prospects of remaining a cornerstone of the DeFi ecosystem are unaffected.
The upside using alchemix , vs just using yearn?
Mainly getting the yield now unlocks different opportunities than having it later.
Example. Take yourself back a month. You have $100,000 in DAI. Bitcoin crashes to from $45,000 to $30,000 or whatever. You kind of wanna BTFD since this might be the most significant pullback you have this bull market, but you’re also concerned this might be the start of the bear market.
If you put the DAI in Alchemix, you can deposit your $100K and get $30K risk-free upfront to buy the dip. BTC price goes up, and you can sell part of it to reclaim your DAI faster and pocket the difference. If it goes down, you haven’t really “lost” anything outside of the ability to access your $100K for like a year until the deposit is repaid.
Also, locking in the funds at a higher amount generates the yield faster. In the above example, if you spend $30K on BTC and put $70K in Yearn, you’re only earning $70K. With Alchemix, you’re making a yield on $100K the whole time.
You deposit collateral and get the yields up front instead of over time. They run your deposit through Yearn until it repays itself, at which time you can reclaim it.
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