Curious facts from Michael@Curve

In his recent interview, Andre Cronje weighted heavily (https://x.com/therollupco/status/2078961843008397433?s=20) in favor of smart contract upgradability, contrary to what he said before. For context: Andre was one of the people who ignited the DeFi summer in 2020, started a bunch of projects (including Yearn) and invented ve(3,3) variant of ve-tokenomics launched in Solidly, now used by Aerodrome. Is he right to bash on immutability? I think no, very wrong. Smart contracts can be hacked if mistakes were made - you know that. But having them upgradable means a possibility of a *hack by modification*. Especially if your upgrades are controlled by an EOA or a multisig, not a DAO. Smart contracts are not large in size, so one *can* secure them in a bullet-proof way. If you are not sure - you can (and should) apply formal verification - it is about to become much more accessible than before (again, thanks to AI). If you are *still* not sure - make an ability to freeze a smart contract so that everyone can just do some sort of a safe withdrawal via the simplest possible route, so you have an emergency plan in case you have some issue detected. If you are a dev - use immutability as your way to protect from all sorts of key compromises or infrastructure compromises, simialar to what LayerZero experienced with Kelp bridging. Immutability is your friend, not enemy. Andre is wrong. 🥳 Curve's UI | ✈️ Telegram Chat | 🤟 Twitter/X 🛸 China Chat | 📱 YouTube | 📱 Discord

So looks like Uniswap finds out tech which was used by Curve since its start in 2020 (using liquidity based on yield-bearing vaults), calls it FX layer (it's USD-USD swaps in reality) and tries to sell to financial institutions as something new? https://blog.uniswap.org/spark-moves-150m-of-liquidity-to-v4-with-new-hook-coming-soon 🥳 Curve's UI | ✈️ Telegram Chat | 🤟 Twitter/X 🛸 China Chat | 📱 YouTube | 📱 Discord

Seeing a lot of fears about Claude Mythos allegedly being released today or tomorrow and "everything getting hacked". I suspect that we should not directly translate its success in detecting bugs in browsers and Linux Kernel to smart contracts. The software where Mythos found something is containing tens of millions lines of code and simply cannot fit the context. Smart contracts are really different. They usually have a few thousand lines of code, and both humans and "usual" AI perfectly fit that code in context and can reason well about it. So I suspect we might not be having a wave of DeFi code hacks, but we may see a lot of things in OpSec getting hacked (looking like multisig keys compromises) and supply chain attacks on frontend dependencies, and those are way less dangerous in true DeFi. 🥳 Curve's UI | ✈️ Telegram Chat | 🤟 Twitter/X 🛸 China Chat | 📱 YouTube | 📱 Discord

Here we go again. Custodial stablecoins EURR and USDR were hacked by company-s multisig wallet being compromised [https://www.coindesk.com/markets/2026/05/26/stablr-freezes-usdr-and-eurr-after-attacker-mints-usd13-5-million-in-unbacked-tokens]. It was a 1-of-3 multisig, i.e. worse than just an admin key. In response to this hack of a MiCa-compliant (!) stablecoin the team did a very EU-compliant thing: froze money of everyone everywhere. So, if you had USDR deposits say on Curve or Morpho - you cannot withdraw. What does that mean? Most likely this: if you see custodial finance (e.g. not decentralized but if someone holds your money) - you should be very cautious. Compliance apparently may mean that risks are higher than in decentralzied finance, not lower.

Seeing many people getting their telegram hacked. The malware uses telegram of someone from your contact list to join some group. The group has a “SafeGuard” mini-app to “verify” yourself. It asks your telegram credentials and starts posting as if it was you. Don’t fall for these and be safe

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 🥳 Curve's UI | ✈️ Telegram Chat | 🤟 Twitter/X 🛸 China Chat | 📱 YouTube | 📱 Discord

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!

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.

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.

Seeing a lot of FUD about Ethereum from Solana bros, so couldn't avoid commenting. Ethereum will do fine, FUD is to distort the perception of speculators. However, there's a grain of truth in it. IMO, L2-centric scaling roadmap DOES break composability. Would…

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

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). 🥳 Curve's UI | ✈️ Telegram Chat | 🤟 Twitter/X 🛸 China Chat | 📱 YouTube | 📱 Discord #YieldBasis #DeFi #s00n

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

Is it ok to write code on Saturday?

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

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

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! 🥳 Curve's UI | ✈️ Telegram Chat | 🤟 Twitter/X 🛸 China Chat | 📱 YouTube | 📱 Discord

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. 🥳 News Curve | ✈️ Telegram Chat | 🤟 Twitter/X 🛸 China Chat | 📱 YouTube | 📱 Discord

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. 🥳 News Curve | ✈️ Telegram Chat | 🤟 Twitter/X 🛸 China Chat | 📱 YouTube | 📱 Discord

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 🥳 News Curve | ✈️ Telegram Chat | 🤟 Twitter/X 🛸 China Chat | 📱 YouTube | 📱 Discord