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I aped in $VVS last morning (11/14). As the old saying “Buy token first, read docs later”, I got out this afternoon (11/15) with small profit but lots of learnings on the Cronos public chain, VVS Finance protocol, monitoring tools, etc. I’d like to share them.
This is not a focus of this article. Please refer to DeFi100’s excellent summary:
https://twitter.com/iDeFi100/status/1459545089072517122
2+ high-quality info source mentioning $VVS on twitter since Nov. 12th;
Strong narrative:
Crypto.org is a competitive CEX, with its own token $CRO;
Per Cronos doc: Cronos is the EVM compatible chain running in parallel to the its own crypto.org chain, with native token also being $CRO;
https://cronos.crypto.org/docs/chain-details/introduction.html
Therefore, Cypto.org ($CRO), CEX + DEX + Public chain, has a good potential: benchmark -- Binance.
$VVS Finance got good ads and discount in fee in Crypto.org official wallet app, leading people guessing it will become head DEX on Cronos.
A common but unfair comparison is APY of DeFi farming over that of traditional finance (e.g. saving account): The former changes in speed of light, with much greater risk as well. What’s worse, a lot of projects are not careful on the terminology. Therefore, I’d suggest firstly to figure out daily no-compounding return:
For high-risk projects like VVS, you will definitely make new decisions (bet heavier, adjust LP allocation, or leave) after a few days (or even hours)’ monitoring. Therefore, No need to look at compounding return longer than 1.
Intra-day compounding could be safely ignored: 2.7% daily return compounded 5000x a day is just 2.737%. On the contrary, inter-day compounding makes a big difference: 2.7% daily return compounded daily turns into 1.67 Million APY.
Check out VVS’s ROI calculator, under current 3 million APY, in a year you’ll see $100 will grow to $30k but that means nothing. See my screenshot below, the sexy 2,990,080% APY is just 2.81% daily return. Would you care more about increasing principal by 2.81%, $VVS price goes up 1000% or the project team rug pull all your money?
I’m pretty confident on Cronos chain as it’s an official project from Crypto.org. However, its out-of-the-air WBTC (and WETH, USDC, etc.) token is suspicious:
Codes of WTBC Token Contract are not open-source on official block explorer. All main tokens like $WBTC come from a single address
0xea01e309146551a67366fe9943E9Ed83Ae564057minting. Technically, those could be just fake tokens happen to have symbol “WBTC”.Tokens bridged from other chains appeared magically in my address without any transaction: I bridged $CRO to Cronos EVM chain via Cosmos IBC, those tokens appears in my address quickly but there is no transactions under my account at all…
Again, no open-source codes. See below screenshot, there is a “Code” tab on their website leading to their GitHub page, where is just empty. I’m not too surprised since $WBTC is already not open-source…
https://github.com/vvs-finance
Astronomically-high Market Value w/o Locking: Cross-check team wallet address in official doc and top-holders on block explorer (below links), we see that:
There are 35 Trillion $VVS in total supply, with 98%+ controlled by top 6 wallets, all matching with official wallet address;
50% is locked (12 months unlock + 4 years linear unlock), which means the other 16 trillion $VVS is in circulation. This converts to $4.8B USD market cap with its current price $0.0003, comparable to $ENS, which is insane.
https://docs.vvs.finance/fundamentals/smart-contracts-and-security
https://cronos.crypto.org/explorer/tokens/0x2D03bECE6747ADC00E1a131BBA1469C15fD11e03/token-holders
Reasons are:
$CRO itself is strong, with super deep liquidity - $200M USD worth WBTC/WCRO LP on VVS. As comparison, Coins as large as $TOKE, $OHM, $CVX have LP pool size larger than $100M USD.
https://dexscreener.com/cronos/0x8f09fff247b8fdb80461e5cf5e82dd1ae2ebd6d7
We all know its ponzi game (disclaim: this DOES onboard new users to Cronos ecosystem, just like how Tech firms pay $ to get new users, so not bad!), we just need to watch the cash flow and run before it’s too late. See next section monitoring
There are two major LPs to watch:
VVS/WCRO: $CRO is much stronger than $VVS, so when VVS farm explodes, this is your safe escape. We need not only monitor the price, but also keep an eye on the pool size (highlighted yellow in below screenshot). When whales dump, they will pull those LPs and swap $VVS for $WCRO, both resulting in fast decreasing of “Pooled WCRO”.
WBTC/WCRO: This one is the ultimate liquidity on the whole Cronos chain. When both $VVS and $CRO explodes you go for this (alternatively you could reach out to bridge but that might become too crowded).
Around 3AM CST (5PM Beijing time), “Pooled WCRO” peaked at 32M USD then started to plummet. You could also see consecutive >$100k USD sells on VVS at that time. If you react in 20min you could get out at $0.00035, compared to peak at $0.00045.
Better, faster alpha come from not just on-chain DEX trades:
Discord: As of 2:34 AM CST (4:34 PM Beijing time), VVS team made an announcement. Not a big deal itself but it triggers the following selloff.
Whale Wallet Actions: As I’ve found above, there is no lock for ~48%, 16 trillion $VVS in protocol team’s wallet. We better keep a close eye on them. Below screenshot is taken before the big plummet, where the #4 wallet still holds 19% (6.7 trillion) $VVS.
However, as of now (after the plummet, see below screenshot), that guy has quietly transferred out (and likely dumped) those tokens.
For interested people wanna chasing this, go:
For quants, you shall not satisfy at here, go get SQL database of the chain, pull all transactions and build cash flow network of $VVS and then do predictive modeling!
Price crash is not the end of a token. There is much more fun trading ups and down using all above alpha sources!