Balancer Fork Cream Gains $200 Million

A fork of Balancer and Compound has managed to attract some $200 million worth of assets in just about a month.

The Taiwanese team behind Cream seams to be differentiating itself by adding what we’ll call defi squared tokens, like yyCurve.

This is where you provide liquidity for 0.2% of the fees with the rest going to the token holders.

In addition pools get varying allocations of Cream tokens with 9 million Cream tokens in total to be distributed as follows:

10%, 900,000 — Team*, vesting over 4 years, 6 month cliff.

10%, 900,000 — Seed, vesting over 4 years, 1 year cliff.

20%, 1,800,000 — Liquidity Provider Incentive.

60%, 5,400,000 — Governance Allocation.

Compound is a “technical and security advisor” and for that they get 225,000 Cream tokens distributed at 37,500 a month.

One tab on Cream is a Compound fork where you lend or borrow assets with it unclear what extras this provides in comparison to Compound save for the Cream yield.

Then there’s the Balancer bit called Swap which they say “is a fork of Balancer, with a Uniswap-like frontend. We like the flexibility of Balancer’s pool customization — token distribution (up to 8 per pool), swap fees (0–10%), and enjoy the simplicity of the Uniswap frontend interface.”

In addition there’s liquidity provision through Balancer’s BLT or Uniswap’s UNI. Both of these as you know by now are LP (liquidity provider) tokens that act as a representation of the underlying assets which are converted into LP tokens and can be converted back for the actual asset.

You can stake these on Cream and get cream tokens with the APY at around 700% for Balancer while Uniswap is at nearly 1,000%.

And that’s the whole dapp. What’s the point of it? It’s not very clear actually because it does not seem to be providing anything more than the dapps that were forked with those dapps in this case having a governance token, so making Cream a bit different from Sushi which has a use-case, albeit maybe controversial, in as far as it provides a business model where ownership is freely distributed to liquidity providers.

The Cream team however seems to be competent, but there’s been no audit because they say Compound has been audited and the Compound team which acts as their security advisers knows best the Compound code.

There’s also been the Balancer fork and other aspects as we detailed above, with presumably the same reasoning applying here.

The team doesn’t seem to be very responsive, so we couldn’t ascertain whether there has been or whether they plan to have an audit for the non-Compound aspects.

We also would have wanted to ask what’s the point of this whole thing beyond trying to justify yet another token with 20% kept by the team and ‘seed’ as they call it for copy pasting.

Yet, there’s $200 million in it so while there’s this token distribution – which seems to be at a slow pace with 380,000 circulating so far – there clearly seem to be plenty who find a point to it.

Risk distribution could have been one had this not been a straight copy paste, and thus gets to share the same bugs as the forked dapps if there are any.

Having different tabs in one dapp, rather than different dapps which nowadays are code connected and even UI connected on third party sites, could be one tiny differentiation.

But the main one really is perhaps just what token they add, however for Balancer for example anyone can add any pool. So the differentiator here is maybe that only the team can add pools.

Perhaps in the course of things Cream will diverge and become something different, but for now just adding a new token seems to be enough to provide liquidity competition.