The mechanism Curve uses is one of the best, if not the best by far. The liquidity providers have reason to keep the protocol tokens, because with them they will be able to participate in the voting system to decide which peers to add and what rewards to give. This started a battle between the other protocols, all wanting to take control of curve governance, so they can vote for higher rewards on their token and grow their ecosystem. These DeFi protocols are competing to get the Curve governance tokens locked into their protocol, offering exorbitant APYS for it. Trying to be decentralized, as always, most of the power ends up in a few hands, even if not their own.
It’s a bit of a gamble, but a very profitable one.
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The PoW of Bitcoin is a mechanism leveraging the game theory.
I agree with some other comments, it would be great to have a clearer and more technical overview of the underlying concept/processes behind the Curve war. It needs a lot research and reading to graps the different concepts.
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I apsolutely do not agree with the claim that Ethereum changes to sound money, it lacks an important characteristic of sound money namely fungibility. Ethereum is not fungible, every address is not the same.
I would add this to the risk, the lack of fungibility makes the token, can be censored(and some are censored), and this makes it not permissionless.
Similarly, most of the projects that are out there . The equivalent of Ethereum sound money is DERO.
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The same can be said for Pancakeswap which is the Binance Defi ecosystem, it is difficult to address the first mover advantage without taking their copyright benefits. At the end of the day if we a truly fighting for decentralize systems there should be a framework favorable for new comers, however I do not like those vampire attacks were there is not innovation just someone copy everything and do an airdrop to take market share.
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Before I could give an answer about “projects with strong game-theoretical models” I did my best to understand what curve is in the first place and what nich occupies in DeFi. In my advantage I have a little experience using DeFi since I have minted DAI when ethereum fees were still low, I have borrowed crypto using AAVE and have done some trading with Uniswap and 1inch. I have even done some basic leverage trading using these tools. So I research about Curve in order to understand the article, and I found that earlier DEXs were so inneficient because of the lack of liquidity pools. In 2017 I experienced with one of these and the hype of the ICOs. New tokens were available in one of them (whose name I don’t remember) and the lack liquidity made the purchase of a new ERC20 tken a pain in the ass. By 2020 things starter to change with liquidity pools. Curve came out as one of them in order to allow trading more easily and efficient, by atracting stablecoins. For that, it needed to incentivise providers by paying part of the fees traders pay. On top of liquidity pools come the aggregators, and I think the article is about them.
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One of the articles referenced to this video is: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3381452 - and I noticed it got removed. It is titled: Token Economics Framework, is there another great reference for Token Economics Framework or “Tokenomics” in general? I often get lost in all of this would love a defacto guide, that isn’t a white paper of 1 blockchain.
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The article was removed or marked as private, still I found this article that i think explain quite well and simple the general concepts around tokenomics.
Please let me know if was helpful for you. 
Carlos Z
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Awesome, thanks, definitely appears helpful.
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De-fi applications are build on top of de-fi protocols and these protocols DeFine the rules and restrictions of the platform and provide developer tools to interact with them.
MakerDAO - is a decentralized autonomous organization (DAO) that provides a platform for users to create and manage their own stablecoins, such as DAI, and to access decentralized finance (DeFi) services. Examples of MakerDAO services include margin trading, lending, and borrowing.
Augur is a decentralized prediction market platform that allows users to create and trade on the outcomes of real-world events. Examples of markets on Augur include sports betting, political betting, and prediction markets for the stock market.
Another one that comes to mind is Lido DAO and polygon earn high APY
I agree. The material is difficult to see for the first time. Also, how does this type of gaming benefit society and financing a better life for people? Looks much like high stakes gambling that favors the few and makes fools out of many more.
The material is a bit deep for the first time seeing this material. The explanations had me confused and I stayed that way for the full lesson. OK I get the basic understanding of what it is and a bit of an inkling of what purpose it serves but Duh I will need more time to grasp this material.
Seem to me the markets exist because of inefficiencies in the trading platforms and liquidity pool yields. Won’t these become less of a problem (opportunity) as DeFi matures?
Even with my economics degree this went over my head in a way I can’t express. I really think this should have been chunked into three parts:
- What is the digital defi stack
- What is token economics (a discrete example versus actual use case would’ve sufficed)
- Recent Real life developments of tokenisation or tokenomics then explain the curve wars
i used Balancer & quickswap for yieldfarming which also resulted in some nice yields.
Examples of other projects:
Aave is a decentralized lending protocol, which uses a liquidity mining program to incentivize users to provide liquidity to its lending pool.
dYdX is a decentralized derivatives exchange that uses a liquidity mining program to incentivize users to provide liquidity to its contracts. The DYDX token holders can vote on proposals that affect the exchange.