David Angliss, an analyst at Australia’s leading cryptocurrency investment firm Apollo Crypto, shares the fund’s regular perspective on what’s happening in the rapidly changing and volatile cryptocurrency space.
If you are a firm believer in decentralized finance and in particular two of the strongest DeFi “blue chip” protocols – Curve (CRV) and Convex (CVX) – then you might be very interested in the latest project that Apollo has put a lot of time into researching. And that would be Conical finances (CNC).
Why? Nice that you asked. Let’s get into that…
What is conical? What is actually Curve and Convex?
Understand Conical finances, you must first understand what Curve is, Apollo’s David Angliss said in a Zoom chat with Coinhead. And convex too.
And he’s right. So just a very quick refresher on Curve, then first…
“Curve is basically the most used DEX [decentralised exchange] and automated market maker protocol [AMM] for stable assets,” Angliss reminded us. “And it has the most liquidity in the industry for stable asset pairs.”
Curve, for example, makes it easy to switch between Ethereum-based stablecoins like USDC, USDT, and DAI, and Ethereum-based “wrapped” Bitcoin tokens like WBTC and renBTC.
“We won’t go into too much detail here, but think of Curve as the base layer DEX – the exchange – and Convex as a second layer that allows for increasing user/liquidity provider rewards on specific Curve pools.” said the analyst.
“And you can think of Conic as a bit like yearn finance for one-way liquidity. It essentially gives you an automated strategy that rebalances your exposure across different curve pools to maximize returns every two weeks.
“It calls them ‘omnipools,’ which are pools of liquidity that Conic uses to allocate a single underlying asset across different curve pools. So it essentially behaves like an active yield farmer for you on Curve.”
To explain further, we took a look at Conic’s minimalist website, which exudes old OS vibes that we’re not sure are somehow cool or annoying. Or somehow both.
Source: conic.finance
“Conic Finance is an easy-to-use platform designed for liquidity providers to easily diversify their exposure to multiple curve pools. Any user can contribute liquidity to a Conic Omnipool, which allocates funds via Curve in proportion to protocol-driven pool weights,” the Conic website reads.
And just to bring it home in case you’re having trouble following, Angliss added the following to us in some emailed notes:
“Conic Omnipools allow LPs to easily diversify their exposure across Curve. Each omnipool allocates the liquidity of a single asset to different curve pools. All Curve LP tokens will be staked on Convex to increase CRV revenue and maintain CVX.
“In addition to CRV and CVX, Omnipool LPs also receive CNC bonuses. Holders can lock their CNC tokens for vlCNC (Voted Locked CNC) to participate in Conic governance and directly control how liquidity is allocated to curve pools by participating in Conic’s Liquidity Allocation Votes (LAVs). ”
Easy right? The fact is, you need to know how the basic principles of DeFi and yield farming work to really get Conic Finance. The best way to understand them is to proceed with some caution with minimal “test” funds that you can afford to lose and actually use these types of protocols.
Off to a flyer in terms of use
Part of what really stands out for Angliss and the Apollo team at Conic so far is the amount of TVL (Total Value Locked) that the DeFi protocol has been able to accumulate in such a short amount of time. TVL can be seen as a good metric to show the activity level and health of a DeFi protocol.
“The thing just went live late last week and it’s already hit over $61 million in TVL, which is really impressive,” Angliss noted. “That definitely makes it a place to be in space.”
Selling out makes it a potentially attractive buy
“Another reason I’m excited to talk about Conic now,” the analyst added, “is that following the launch of its Omnipools last week, which caused a bit of a stir in the DeFi space, it’s to some extent Sale has come -News event on it.
“And that means there could be some decent ways to get into the CNC token at some discount.”
Source: CoinGecko.com
The way Apollo is manifesting its investment thesis in these types of DeFi projects, Angliss explains, is by using and testing the protocols themselves, then potentially investing in the assets themselves — ie. in this case the purchase of the CNC token.
“We are taking a very close look at Conic. If it ends up passing our rigorous yield farming tests, we’ll likely add it to our long position funds as well.”
More bullish notes
And finally, some other information you might want to consider when it comes to CNC as a potential small investment in your crypto portfolio’s DeFi allocation…
• Conic has been officially audited by respected blockchain security firm Peckshield and the report will be released in the coming days.
• The CNC/ETH curve pool has been very profitable for liquidity providers so far (with a weekly vAPY* of 16.54%) and has already generated good trading volume.
• In Apollo’s opinion, Conic has the potential to sit in the same discussion as DeFi blue chips such as Curve, Convex and Frax. “It has the potential to reach the size of Convex,” Angliss said. And looking at the market cap of both projects, Convex’s is currently around $447 million (fully diluted: $593 million), while Conics is at $33.4 million (fully diluted: $84 million). ).
In other words, Conic’s valuation is roughly 13 times smaller than Convex’s, meaning it could have excellent growth potential if it actually becomes as successful a DeFi protocol as Apollo Crypto believes it will be.
* vAPY refers to the annualized rate of trading fees earned by liquidity providers in a DeFi liquidity pool.
None of the information or opinions expressed in this article should be construed as financial advice.
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