More and more people report that impersonators are DMing everyone pretending to be me, non-stop. Be careful, that's a trap!

Having to disagree with the recent BIS report about stablecoins:
https://cointelegraph.com/news/stablecoins-fail-money-bis-report

According to them, stablecoins perform poorly on 3 tests: singleness (all stables are worth exactly the same amount), elasticity (cash-in-advance requirement) and so-called integrity (money laundering and sanction evasion possible).

- Singleness. USDT and USDC are really no less "single" than bank deposits - everyone can redeem those to the face value of USD. Of course, these assets are ALSO freely traded, so market price can deviate from face value: that can absorb immediate demand (during weekends when banks do not work for redemption, trading demand which is higher than what can be immediately redeemed etc). But tokenized bank deposits would have the same property. Besides, one could sell deposits of a failing bank on a secondary market and exit with a haircut - just like SVB collapse caused USDC to temporarily get a discount due to people selling it on secondary markets.

- Elasticity. Money in banks are not moving fast: usually it is at least T+1 settlement (e.g. 1 day after). So banks can print money while the actual funds are in transit. Stablecoins don't necessarily need this mechanism because settlement is instant. But similar mechanisms can be created, and actually ARE created for non-redeemable stablecoins: for example crvUSD has flash loans with "unbacked" stablecoins because they have to be returned right in the same transaction.

- Integrity. Banks indeed have AML measures which allow to track and freeze assets for anyone transacting, and crypto does not have those capabilities by nature (although USDC and USDT can be frozen). One can of course pre-program "KYC-only" requirement in a stablecoin, but such stablecoins get very little adoption due to inconvenience of use and compliance tools giving false positives (I myself was wrongly flagged b automated tools several times).
But maybe these measures help a lot? Not according to reports which say that less than 1% of financial crimes are stopped (https://regulationinnovation.org/impact/financial-crime/)! Yet, we do have hacks happening in crypto (and they are VERY annoying), but maybe around 50% of the hacked funds get eventually recovered (thanks to ultimate transparency of blockchains unlike banks which are inherently opaque). Much higher than 1% (and some estimates quote much lower numbers for efficiency of AML measures).

So, in my opinion, stablecoins are no worse, or maybe even better than traditional "banking" money on all these three points.

Ethereum is turning 10 years old: the time flies! Over that time, it has grown from an idea to the foundation of the new financial system.
It so happens that I have been a part of this journey via founding Curve, and I am now very honored to join this celebration as one of Ethereum's chosen torchbearers.

But the Ethereum's growth we see is just the beginning! The next big step is real-world integration. Not just experimental dApps, but resilient protocols that can handle international settlements and reshape how the global society interacts with money.

As a DeFi developer, I hold to the stance that we’re not just building “products” — we are building core infrastructure that economies will one day rely on.

To serve as the backbone of tomorrow’s economy, these core services must be robust and transparent. That’s why I’ve been building on Vyper — a language built for Ethereum with clarity and security at its core. Its clean, auditable structure minimizes technical debt and makes smart contracts easier to verify and trust. In my view, this kind of architectural discipline is essential for Ethereum’s long-term role.

Ethereum has all the chances of becoming the foundation for that global financial ecosystem. Its design has always prioritized commitment to decentralization, and the neutrality of its infrastructure makes it a suitable choice as the basis for the future worldwide economy that won’t buckle under political or technical pressure.

The future won’t be about chasing TVL or transaction speed. It will be about trust. About transparency. About making decentralized finance something whole nations can rely on. If Ethereum is to be the core of the global economy, the DeFi sectors as a whole must stop confining themselves by short-term goals and instead start thinking how they affect the Human Civilization as a whole.

Anyone else is debugging on paper?

Someone turned on Bitcoin volatility on October 10. Who should I thank?

As Yield Basis pushed crvUSD liquidity a little bit up - we started seeing a curious fact: USDT volumes (normalized to TVL) are larger than USDC

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What recently came to my attention is the story of Bunni. Bunni was a liquidity engine on top of Uniswap v4 (yes, with hooks), with ve-tokenomics. Good engineering which'd use the best kind of token economics in the world combined with concentrated liquidity. Btw this approach was shown to work if collaboration with a "bigger guy" (Coinbase) is established (Aerodrome).

Anyhow, Bunni was built using Uniswap v4 hooks. And they are VERY hard to build on. Uniswap Foundation was not quite interested in helping them with reviewing the code or audits. So Bunni (who did audits it could afford) eventually got hacked and is now forced to close down [https://x.com/bunni_xyz/status/1981160279871558114].

Uniswap could have helped them to make it not happen. They could have rescued them after the hack, they have funds for it. They could have used it as a message "build on hooks, we will help you". They did not.

I just feel sad for the devs who chose to build on Uniswap and got betrayed. Idk, maybe Uniswap is just not interested in building the ecosystem where hooks do something else than KYC.


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I've noticed some projects out there tend to mention my name or Curve to boost their credibility. Yes, as a developer myself, I often support early DeFi builders as an advisor or investor. But that doesn't mean I'm involved long-term or responsible for what they do.

I am directly involved with Curve and Yield Basis, and also I did work on NuCypher (now part of Threshold Network) in its early days.

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Had a sudden thought yesterday. Fusaka Ethereum upgrade is actually good not just for performance - also for safety! How so?

Well, when Ethereum gas was high - everyone tried to do all sorts of tricks to make their code cheaper to execute. For that, one can avoid re-reading storage variables (often at the expense of readability), use unsafe math or inline assembly. It is MUCH HARDER to build safe smart contracts this way.

If L1 gas becomes truly cheap - we don't have to do all of that. Just maximize safety and readability - that is it!

And remember that Chernobyl disaster was essentially caused by trying to save a little bit on manufacturing control rods, having their "useless" tips filled with graphite. Saving a few pennies in transaction prices on EVM can sometimes lead to similar disasters!

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So, it's the end of year - December 31st. Time to review the results of 2025 and look into the future!

For Curve, 2025 was an interesting one. Here are some highlights:
- Thanks to the introduction of Savings crvUSD, the price of crvUSD become very stable, comparable with that of USDC and USDT;
- crvUSD appeared to be the highest-trading-volume decentralized stablecoin towards the end of the year (thanks for launching Yield Basis);
- We never paid much attention to the number of active users, but surprisingly it actually grows all the time. For example, this year it's 4 times larger than in 2021;
- The highest-ever quorum was reached in a Curve vote - 93% turnout for the proposal number 1279;
- Biggest pools with wrapped Bitcoin are now on Curve (and what's surprising - they are BTC<>USD pools - also thanks to Yield Basis);
- Curve suddenly jumps to be on par with Uniswap with total fees collected for swaps (those are split between LPs and admin fees);
- Special pools were launched for creating liquidity for non-USD stablecoins: FX pools.

Notably, in 2025 Yield Basis was launched, and it already had time to demonstrate that it indeed eliminates impermanent loss which was so annoying for LPs and allows to convert crypto volatility to yields.

Everything created and achieved in 2025 points to what waits us in 2026:
- The work of Yield Basis inevitably increases the amount of crvUSD available for borrowing (potentially, billions, or maybe even tens of billions of crvUSD). Therefore, our team working on Curve will launched the improved LlamaLend (2.0). This improves not just lending but also minting of crvUSD - for safer and more convenient loans and leverage positions;
- USD stablecoins account for 99% of value of all stablecoins currently. Let's change that with FX Swaps!

2026 plans for Yield Basis are also clear:
- Scaling, scaling and scaling again! Everything points to the market having a potential to accomodate for 100-fold TVL increase;
- Adding new assets (starting from ETH). Of course, these should only be the safest and most stable ones.

Anyhow, less words - more action. Happy New Year of 2026!

#DeFi, #Curve, #stablecoins, #Bitcoin, #yield

I've become very curious about the crypto bill which is being considered in the US Senate (and which is currently being delayed because of pushback from Coinbase) [https://www.reuters.com/sustainability/boards-policy-regulation/coinbase-cannot-support-crypto-bill-current-form-ceo-armstrong-says-2026-01-15/]. Coinbase is a centralized financial company which has its own goals, so I wanted to check it from DeFi perspective.

And since this language is not very well comprehensible by humans (but very precise) - I decided to vibe-read it using ChatGPT. Looks surprisingly good - try it yourself! You just attach a file and question GPT about it. Here's what I've got: https://chatgpt.com/share/6968d01d-e2dc-800d-a9b6-ccc919a7e624

Key takeaways:
- DeFi will not need AML/KYC if it is truly decentralized;
- Decentralization is defined by who controls the governance. Founders control it = non-decentralized, founders + their VC buddies = non-decentralized, being able to make contractual agreements on vote outcomes = points to non-decentralized;
- Surprising about decentralization: DELEGATION CAN MAKE PROTOCOLS NON-DECENTRALIZED! Yes, if all votes delegate control over the protocol to a company which operates it - non-decentralized. Direct democracy (like in Curve) for the win!
- Static HTML/JS frontends do not need AML/KYC but they may need to block by IP or wallet with sanction lists IF OPERATED/OWNED BY US PERSONS/ENTITIES. Yes you read it right: frontends outside the US = no need to apply these filters EVEN IF US USERS ARE ALLOWED. That's AI told me though.
- Decentralized yield bearing stablecoins like sDAI or scrvUSD are allowed without restrictions. WOW!
- Farming yield from federal reserve or banks and passing to users is NOT allowed. That's what Brian Armstrong doesn't like.
- Ethena's sUSDe may classify as security because its yield is clearly generated in a non-decentralized fashion. Who knows - maybe this will change in the next versions of the proposed bill?

Overall, I see this as favourable for truly decentralized finance (like Curve or Yield Basis). If you build something which is not yet decentralized but can be - move that way!

#DeFi #crypto #regulations #USA

Is it ok to write code on Saturday?

Pretty picture? More of those in this proposal
https://forum.yieldbasis.com/t/tweak-weth-pool-parameters-for-safety/25

#DeFi #Curve #YieldBasis #AMM

Wow, that's quite a volatile day, and quite a peg shaking for crvUSD. But here are good news:

- crvUSD is still overcollateralized and fully backed, no surprises;
- Yield Basis earned something on volatility;
- More information just before releasing HybridVaults which enable unbounded scaling of Yield Basis.

Wait, what's HybridVault? These are vaults where in order to go above the "normal" Yield Basis cap you need to keep some crvUSD (in Savings crvUSD so that it's not boring). So you carry a supply sink with you (but no IL for that - it's not mixed with Bitcoins).

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Upgradable smart contracts are a bug [https://medium.com/consensys-diligence/upgradeability-is-a-bug-dba0203152ce]. Remember this? It's mostly controversial now because very few projects do immutable smart contracts these days (but Curve and Yield Basis do).

So why immutable smart contracts are good?

- Humans make bugs in code. Steve McConnell in his book "Code Complete" famously wrote that average for software engineering industry is 1-25 per 1000 lines of code, which get to 0.5 defects per 1000 lines in Misrosoft after good testing. Average smart contract is several thousand lines = 1 bug after rigorous testing, hopefully not critical (critical parts should be smaller than few thousand lines). Now, imagine that smart contracts will be upgraded again and again and again - and now you need to secure not 2000 lines but 100000 lines (smart contracts in each release).

- Yes upgradability can save you if you find a mistake before hackers. But if you don't? Whoosh!

- Upgrades can break integrations. Remember Curve pools which use Aave tokens which are now disabled? Not nice.

- What if devs will be replaced by new devs? Will they be as competent as before? Less trust to humans = better!

- Maybe not an issue now, but upgradability does increase regulatory attack surface.

So, immutable smart contracts for the win!

#DeFi #security

Looks like Vitalik now came to the same vision about L2s. Very very nice!

https://x.com/VitalikButerin/status/2018711006394843585

Yesterday I noticed some unusual swaps in Yield Basis related pools on Curve. At first, I was very worried (always good to check when you see something unusual), but it appeared that the reason was someone exchanging 50M USDT to 36k USD worth of AAVE (sic!) [https://x.com/StaniKulechov/status/2032193345414664659].

On Aave, you can essentially swap collateral via an external exchange platform - CowSwap in this case. Aave (rightfully) made a warning that it's gonna be 99.9% slippage. But who reads warnings? What's slippage anyway? The user (on mobile!) pressed "proceed anyway". Rekt.

New wave of DeFi users are way less smart than we used to be in 2020, and same methods do not work! So... what can we do for them?

One thing: if there is an alternative how to do this action better - it's good if UI switches to the better way. In this case it'd be a limit order (but also TWAP could have been better).

Another one: I think that the method which CowSwap uses (e.g. competition between solvers) is unsuitable for such large swaps (and in this case, solvers failed even more miserably - they could've returned up to 7M worth of AAVE). IMO a much better way is what 1inch does: a moving limit order which can be arbitraged with CEXes as well. Maybe that's a better model overall. Cow wins competition not so much with technology but with a very very good UX.

And of course for users: it's totally not good to operate with any meaningfully large amounts from mobile. Mobile-first and big money are not very compatible.

A quick thought about Bitcoin quantum safety (even though I am somewhat doubtful about the claim that "everything will be hacked soon" but who knows).

Today Bitcoin addresses are not reversible to private keys even by quantum computers. But as soon as the address transacts - it well can be since public key / signature is exposed. Bitcoin transactions do not reuse addresses by default these days, so the problem appears only while tx is pending, but that can be enough time to hack the key corresponding to this address and redirect the funds.

If Bitcoin introduces a new quantum-safe signature scheme - they CAN migrate without users having to do something! Just first tx old_signature_address->new_signature_address must be a zero-knowledge proof of sorts which does not expose the public key or signature corresponding to the old address (which was using the quantum-unsafe ECDSA).

This, however, still leaves Satoshi's Bitcoins vulnerable, and there is no workaround here. So that jackpot will be available to whoever makes the first quantum computer: likely a state actor, probably the United States (which will, of course, make Bitcoin Great Again).

Otherwise (unlike Ethereum or Solana!) there's a clear and simple migration path for Bitcoin which does not require users actively migrating their accounts before quantum computers become available.

Observing the hack which happened yesterday to rsETH, which caused a serious contagion at Aave. Wow, it's a lot to unfold.

First of all, looks like there is no exposure of Curve or Yield Basis to either rsETH or Aave problems. But this all of the issue started with LayerZero which is relied upon by crypto with quarter of a trillion in value. How? Let's have a look.

Kelp's rsETH uses a LayerZero bridge. The bridge allows to transfer rsETH to/from other chains. Minting of rsETH can only happen on Ethereum, and all the rsETH on non-Ethereum chain are backed by mainnet-rsETH kept in the bridge.

On LayerZero one can choose so-called DVNs. DVNs are nodes which essentially bring a message from another chain. 2-of-3 DVN configuration would mean that two DVNs should agree on the fact that "give 100'000 rsETH to Eve" is exactly what was requested on another chain. And here's the problem: rsETH has a 1-of-1 DVN configuration: just one DVN (although it's the main LayerZero DVN) is used and fully trusted. So it approved a message which allowed to give the hacker all the rsETH in the bridge, although it was never sent on the source chain (Unichain in this case).

As you probably heard, 1-of-1 configuration for multisigs is kinda unsafe. Same with DVNs. But this was THE official LayerZero DVN - how could it approve a wrong message? Was it hacked? Was it fooled? We don't know. But things can happen when you trust one single party - whoever that would be.

So ok, the hacker fooled the official LayerZero DVN to give him a lot of rsETH. What's next? The most profitable for the hacker appeared to supply rsETH on Aave and borrow all possible ETH there. And Aave was left with rsETH which cannot be really sold and maxborrowed ETH, so no one can withdraw ETH. Potentially 300m-sized bad debt. Maybe not - technically those are still backed, but bank run on Aave is happening.

So which conclusions could we make from this?

* Non-isolated lending like on Aave is very risky (although it's the most capital efficient!). Aave v4 with hub-and-spoke model is probably less risky. Morpho also. And lending on Curve, as well as Silo, is probably the most isolated -> safest in that regard.

* Lending protocols are riskier than DEXes to supply funds. USDC/USDT pool on Curve has only exposure to the two assets in the pool, Aave has exposure to all asset added there.

* Asset onboarding on lending protocols should be looked at more carefully. 1-of-1 DVN configuration on rsETH is really a miss: this should have been upgraded to at least 2-of-2 before onboarding.

* Cross-chain is hard and potentially risky. Only use cross-chain infrastructure when absolutely necessary, and do it REALLY carefully.

In any case, I think DeFi will learn from this incident and become stronger than before. Crypto is a harsh environment which no bank would have survived - yet we are working with that. Permissionless infrastructure requires extraordinary efforts to be safe - and we are doing those efforts!

I've made a proposal on how to recover bad debts in lending protocols, starting with Curve's own one as an example.
Better than bailouts?

https://gov.curve.finance/t/crv-long-llamalend-market-recovery/11062

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