Cream Finance Crosses $300M in Deposits

Cream Finance Crosses $300M in Deposits

September 22, 2020 Decentralized Finance DeFi 0

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Cream Finance Crosses $300M in Deposits

By Cooper Turley

What happens when you fork Compound and add lending pools for DeFi’s most degen assets? You get Cream Finance.

In under a month since launch, Cream has aggregated more than $300M in TVL, according to DeFi Pulse, largely thanks to CREAM liquidity mining rewards.

Image source: DeFi Pulse

What started as a lending protocol for trendy DeFi tokens like SUSHI, yETH, and yyCRV has quickly blossomed into a vibrant market of 19 assets and counting, many of which are only available for lending on Cream. 

Governed by CREAM, a token boasting a fully diluted market cap of $2.5B, the YOLO protocol is undergoing a suite of proposals to further lock (or even burn) a vast majority of the outstanding supply to fall more in line with its circulating market cap of $100M.

More than Lending

Last week, Cream unveiled C.R.E.A.M Swap, a native AMM allowing traders to enter and exit convoluted DeFi strategies without having to unwrap, unstake and sell positions composed of numerous assets across a multitude of protocols.

For example, users can go from yyCRV, a liquidity provision in Curve staked via a yEarn yVault, directly to USDC, rather than having to unstake and withdraw for ~$100 in gas.

As to be expected, liquidity providers in select pools are now earning CREAM rewards, currently averaging ~1000% APY at the time of writing. To note: Annual yields often exaggerate actual earnings, as it’s unlikely returns will remain stable.



Contributor: Fernando MartinelliCo-founder & CEO at Balancer Labs

  • The first ever initial token sale on a Balancer Liquidity Bootstrapping Pool (LBP) was held from Sept. 9-11, as the team launched the PERP token. The offering validated LBPs as an effective mechanism for running a decentralized token sale with fair competition, even token distribution, and healthy price discovery with minimized volatility.

Source: team
  • As intended, the LBP neutralized advantages that bots typically have over analog human investors in token sales, by shifting incentives from buying immediately to waiting for the market to determine a fair price. This is exemplified by a likely automated purchase made at the start of the sale that was subsequently sold back at a loss. A total of 1,355 investors participated, with the vast majority appearing to be long-tail investors accumulating relatively modest quantities of PERP. Only 8 participants accumulated more than 1% of the PERP tokens sold, with the largest stack amounting to 4.1%. The order sizes seen in the chart below indicate that some whales were involved, but most orders were within the reach of typical investors. Order sizes chart:

Source: team
  • The PERP LBP achieved starkly different price discovery compared to recent token offerings such as UMA and BZRX, which were sold via Initial Uniswap Offering (IUO). The PERP sale, which lasted 3 days, reached its lowest price of 1.058 USDC approximately 12 hours after the sale began; subsequently reaching a high of 2.304 USDC about 33 hours into the sale, resulting in a delta of 118% from trough to peak before settling on a final price of 2.076 USDC. In contrast, the UMA token sale reached a high 500% above its opening price in less than 10 minutes, while BZRX soared 1,200% within the first 60 seconds of its sale. Here is a chart of the PERP token price as the sale unfolded:

Source: team
  • Zooming out on the DeFi ecosystem, Balancer currently ranks #3 in the space with the lowest price-to-sales ratio (calculated via TokenTerminal’s methodology: fully diluted market cap divided by annualized revenue) at 17.8x (lower is better!); ahead of Kyber Network (#4) and the Ethereum network (#5). It currently sits behind only SushiSwap (#1) and Uniswap (#2). Looking a little closer, however, Balancer’s price to sales ratio is actually even lower. While it’s true that 100M is the maximum theoretical BAL supply, this amount will likely never be reached. As a point of reference, growth companies commonly trade at price-to-earnings ratios of 100+.