Will Solidly And Everything Around It Survive Its Creator Andre Cronje’s Departure?

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The Solidly exchange is an AMM DEX (Automated Market Maker-based Decentralized Exchange) with great ambitions. The protocol aims for the highly coveted zero slippage trades, in which every trade is executed against real-time price feeds, and provides several possibilities to maximize your investment. Solidly runs on the Fantom blockchain. Its creator, the legendary Andre Cronje, co-developed it with the creator of Abracadabra, Money and Wonderland, Dani Sestagalli. Solidly entered the space with a bang in February 2022, but the buzz has decreased since then. 

The price dropped precipitously with Cronje’s announced disappearance from the DeFi space in March. Recently, the Fantom Foundation’s Anton Nell tweeted that “there are around ~25 apps and services that we are terminating on 03 April 2022.” Some of those projects continued independently, others folded completely. The market reacted emotionally and the SOLID token tanked. It was around $3 when the tweet went out and it’s around $0.5 at the time of writing.

Thankfully, and this is just a plot twist, Solidly was created to stand on its own. The series of smart contracts that underpins it are immutable. Solidly’s engine is already running and the protocol is already rolling. Plus, staked SOLID tokens transform into veSOLID, a governance token that gives users voting power over the distribution of SOLID tokens. 

Does Solidly need its creator to thrive? That’s for the market to answer. 

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Solidly Is A Curve Killer With An Edge

I sat down with crypto expert Mark Jeffrey prior to Cronje’s departure, in a March Cryptonized episode. Jefffrey was bullish on Solidly, describing it as a “Curve killer.” The platform’s reason to be is to provide a cheaper alternative to the Ethereum-based Curve, and to improve upon it. 

The Top 20 projects in Fantom, ranked by Total Value Locked, received a very special bonus. The first 20 million SOLID in existence were distributed among them, for those projects to allocate among its users as they saw fit. According to Jeffrey, the protocol incentivizes staking SOLID by punishing whomever is not doing it by constantly diluting their stake with SOLID issuance. 

‍This Solidex post explains the mechanism:

“SOLID lockers increase their holdings proportionally to weekly emissions. This makes the value proposal of locking very attractive as your lock does not get diluted by new SOLID emissions.”

As Convex emerged over Curve; Solidex emerged over Solid. Its token is the hilariously named SEX. On the Solidex website, the protocol defines itself as a “yield optimizer for Solidly built on Fantom.” Basically, they seek to get all of the Solidly governance tokens that they can and put them to good use. On a section of said website, they explain the services they offer:

“If you wish to lock SOLID, Solidex allows you to earn a larger share of trading fees and rewards.”

• “If you wish to be a liquidity provider, Solidex means you can earn boosted SOLID rewards without having to lock SOLID for several years.”
• “If you wish to maximize voting power and influence over SOLID emissions and gauges, Solidex ensures veSOLID is always max locked in order to maximize voting power.” 
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Worried About Solidly’s Inconsistencies

Apparently, nowadays, there are 100 Million SOLID in circulation. Nevertheless, tokens keep being created. The problem, according to Mark Jeffrey, is that there’s inflation but there’s no official information about how much of it there is. Plus, nobody knows exactly how the token is being distributed, and what to do to get it besides staking. In a related instance, Andre Cronje said that the SOLID issuance is 2 million per week. However, the community examined the code and it says they’re creating 20 million tokens per week. 

Are we dealing with serial lying or honest mistakes?

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What does Solidly do, anyway?

The software is based on Uniswap V2 as much as on Curve. The AMM DEX ensures there’s a liquidity pool for each pair of tokens, and users can swap between them without a central authority overseeing the process. The secret sauce is that it provides zero slippage, which Yuval Taylor defines as “the difference between the price as listed and the price you actually pay.”

Holders participating in liquidity mining get SOLID tokens in return. These are the characteristics of the token, according to Solidex:

“Solidly token exists in two forms: the main one is SOLID which is tradeable but doesn’t grant you voting power or revenue. The other one is veSOLID which is a locked state of SOLID. ‘ve’ stands for vote escrowed, a popular new DeFi primitive, which was first introduced by Curve Finance.”

Besides the veSOLID, stakers receive a tradable and sellable veNFT. Their SOLID is locked for a time period, but the NFT representing those coins can be used as collateral for borrowing other assets, can be sold without affecting SOLID’s price, and can be rented to someone who wants the voting power it represents. This is where Solidex comes in. Participants in the parallel protocol “receive boosted SOLID rewards without the need to maintain their own lock.”

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What happened to Andre Cronje?

Since the extreme success of the automated yield optimizer Yearn Finance in 2020, South African developer Andre Cronje has been a DeFi rockstar. As one of the main figures behind the Fantom blockchain, he had his hands on many related projects. Solidly was his latest venture, but by no means the only one he was involved with. 

However, it was the project that put Fantom on the map. The Total Value Locked in Fantom DeFi was around $3 billion, and it rose to about $12 billion with Solidly’s release. That was before Cronje’s departure, though. Even though the project continues and the keys to the kingdom are already in the successors' hands, the creator’s shadow looms over Solidly.

What happened to Andre Cronje, though? The man is fed up with DeFi’s current easy-money ethos. In a March 12th Medium post, Cronje returned to say “I now more than ever see the need, or even necessity for regulation, not as a mechanism to prevent, but as a mechanism to protect.” However, only a month later, on an April 19th post, Cronje sounded defeated on that front.

“Crypto regulation, is in my opinion, simply infeasible. As public blockchains have no domain, they should be guided by Maritime law. Without geopolitical dominion no one can lay claim to these lands.”

What will Cronje do now? He’s offering companies a service, to “provide, advise, and strategize on regulated crypto access. Or phrased alternatively, how to onboard institutional entities in a language they understand without forcing them to incur technical debt.” Sounds good, but, what about Solidly? The project marches on without him. Can it succeed without its creator? That’s the million-dollar question.

Check out Mark Jeffrey’s Cryptonized interview for extra details and advanced strategies for the Solidly protocol.