Andre Cronje: DeFi Expressionist

Andre Cronje has little good to say about crypto tokens. 

This summer, when every decentralized finance (DeFi) startup on Ethereum started goosing their growth with “governance” tokens, Yearn Finance‘s creator, Andre Cronje, dropped a growth token on it without reserving any of them for himself.

Any token distribution that eschews set-asides in this way is now known as a “fair launch.”

“Andre invented a new way to launch projects, without money,” said Scott Lewis, of the metrics project DeFi Pulse. ”He proved you could launch a DeFi project by just building something and then getting a community and then using the revenue from the thing you built to fund a team.”

The distinctly counter-cultural move becomes less surprising once the man is understood as more creator than developer, more artist than arbitrageur.

On Erica Kang’s YouTube show at the end of September, Cronje compared decentralized finance (DeFi) in 2020 to the initial coin offering (ICO) boom in late 2017. “We’re sort of in the same space now, where everything thinks they need a token. They really think they need a yield farm,” he said.

Thoughtless me-too’ing, he went on, makes “it difficult for someone looking in from the outside to take this DeFi movement seriously, because, now when you come in as a potential interested investor who might want to look for some of these opportunities, you first have to read about sushi vampire attacks and pickle farms.”

Cronje is ambivalent about the industry’s potential. He both believes it is overhyped but also regrets the cynical fixation on gains, as he said in March 2019 on another YouTube show, CryptoZombie. He told of how he went to Consensus 2018 and, while people were kidding themselves about blockchain’s transformational potential, they “had a sense of hope” he said. By 2019, he saw people either leave crypto or grow jaded. “People have realized the product is a lie, adoption is a lie – all of those things [are] kind of garbage – and the token is the new product,” he said.

Despite his copious reservations about this space, Cronje pushed the first commit on what would become Yearn Finance on Jan. 20, 2020. A yield optimizing application, Yearn has teased the billion-dollar mark for assets under management in its Ethereum-based smart contracts.

It is important to note that Cronje did this. Not a team, not a company. He is very clear that he operates on his own, and I submit this is no accident. In various podcast and video appearances over the last year he has said many ways that he could leave at any time, and he’s keeping that option open in no small part by never committing to something he can’t responsibly abandon.

“I have no vision. I have no plans. I have no goals,” he told Kang. “For now it’s fun. Maybe in a month it’s no longer fun and I go back to playing Warcraft.”

When someone warns people again and again that he could leave at any time, it might mean that person really will.

Cronje has often been tempted; Satoshi did.

Uncle block

On that note, let’s deal with something up front: Cronje would not speak to me for this story because I wrote a post in October that said he was leaving DeFi that he didn’t want me to write. 

I wrote it because that’s what he told me, and I knew that there was a lot at stake. Yearn had, then, over $700 million in assets wrapped up in it, buoyed in no small part around a cult of personality around Cronje.

CEO Stani Kulechov, of the crypto money market Aave, has worked with Cronje unusually closely, though they haven’t met in person. “Knowing Andre, he doesn’t care too much about the financial aspect. Even if he cares, he won’t care that much. It’s more about products – creating something and people saying: ‘That’s cool.’ He’s a builder at heart,” Kulechov said.

DeFi has made me neglect my life, my health, my sanity. I do have to put it first.

After that story came out, Cronje wrote me on Telegram that he wouldn’t reply to my messages again. Nevertheless, I reached out for an interview for this profile and was met with silence. He was true to his word.

Regardless, as soon as I had reported what Cronje had told me about leaving, he was back in the game. Had he been on his way back then anyway? Looking back on it now, he probably was, but I didn’t know his history well enough yet to understand him more as more an artist than an engineer.

Initial commit

Cronje dates his interest in crypto back to the tail end of the last bitcoin bull run, sometime around late 2017 when he started looking at white papers and Github repos, when his business partner of the time left him on his own for a bit to go on a honeymoon.

“If he didn’t get married and didn’t go on honeymoon, I’d probably still be doing the same stuff we’d been doing the last five years,” Cronje said.

In September 2020, on Laura Shin’s podcast “Unchained”, he would say that late 2017 “was the first time there was enough assets, and there was enough protocols and there was enough toolings.”

Based on his LinkedIn profile, Cronje is a bit older than most folks in the crypto set. He studied law before he studied code. When code started interesting him he got up to speed with incredible alacrity, and that quickly got him hired in the telecommunications world, which familiarized him with distributed (if not decentralized) systems.

Once crypto had his attention, he began doing code reviews at Crypto Briefing. Eventually he started working for an ICO-funded project named Fantom, a directed acyclic graph blockchain out of South Korea.

Even then, he was already frustrated about token culture. “There’s so much time, energy and capital wasted playing the token game as opposed to playing the product game, which in the long term has a benefit for the token,” he said on the YouTube show, “Oh Hey Matty”, in March 2019.

Nevertheless, he took on the challenge of helping people with crypto tokens get more crypto tokens.

“The Yearn thing actually started because I had my own little stablecoin portfolio and I was trying to manage it like a savings account.” Cronje said on the July 29 FTX podcast. “Ninety percent of DeFi is just figuring out how these protocols interact with each other.”

He favored stablecoins because he didn’t like dealing with impermanent loss, the way liquidity pools of other, volatile tokens lose dollar value even as they increase crypto value. “I wasn’t comfortable making cryptocurrency decisions, because I do not understand the cryptocurrency markets,” Cronje said.

On Feb. 4 he wrote a Medium post about launching iEarn (which would become Y.Earn or just Yearn) and how it cost him many thousands of dollars in fees out of pocket just to get it live. At the end of the month, he wrote another post that said launching it presented more roadblocks than he could have anticipated.

“It has been amazingly fun to face all these challenges, and each one I believe has created a more robust ecosystem,” Cronje wrote. “Looking forward to many more problems to come.”

Reality quickly set in as “more problems” came. “There was a front-end issue where someone swapped a big amount and had some loss,” Kulechov said.

Cronje wrote a blog post with the title “Building in #DeFi sucks”. It read, in part, “Honestly it sucks. It’s expensive, the community is hostile, the users are entitled.”

He went on to complain about the constant criticism he faced and the unrealistic expectations of users. On some level, it should be noted, Cronje did sort of set the expectations in a funny way himself. In his posts about the progress of iEarn, he always wrote about it as “we did” this or “we launched that” even though it was always just him.

Kulechov said he felt like Cronje realized, “I don’t want to be like a 24/7 bank with technical support and client support.” It was too many hats for him, Kulechov surmised, and “Then he disappeared.”

Fork

Following that exit from DeFi, he mainly occupied himself playing the MMO World of Warcraft, he told Kang.

But he also told Kang that he was “Yield Batman,” and that he would be there when people needed him to help maximize opportunities.

Yield farming became an adoption accelerant in June after Compound released the COMP governance token, and that seems to be what lured Cronje back, according to Kulechov.

It was also in that era when Kulechov really became perplexed by Cronje’s penchant for deploying directly to mainnet. As his Twitter bio has always said, “I test in prod.” By “prod” he means “production” and by “production” he means Ethereum mainnet.

Kulechov said he’d try to get Cronje to do testnet tests, but he didn’t like doing so in those days. It wasn’t his style. “For him deploying on the mainnet is practically creating the piece of art and putting it on a public place,” Kulechov said. Testnets are ephemeral and ignorable.

This new iteration changed iEarn to Y.Earn (from ‘I Earn’ to ‘You Earn’), and a month after COMP was released Cronje wrote “Yield Farming 101” on Medium, explaining with some glee how complicated yield optimization when stablecoin deposits also earned volatile growth tokens.

On July 17, Cronje revealed his plans for his own growth token: the YFI token. This is when Cronje’s profile went into the stratosphere, precisely because he would not set any aside for himself. All of it would go to liquidity providers.

It brought the notion of the aforementioned fair launch to DeFi. On Yearn, anyone who put liquidity in a few pools would get an equal shot at the YFI tokens going forward, no pre-mine, no set aside, no early heads up to insiders. Bitcoin, it could be said, did the same thing, only it rewarded hash power rather than deposits, but it’s still just a matter of putting resources in the place a particular project most wanted contributions.

“Dozens of projects were inspired by the Yearn launch to launch in that same way. The success of YFI greatly lowered the barriers to builders getting their work out there,” Lewis said.

Kulechov, a founder himself, said a team allocation isn’t merely about extracting wealth from a decentralized application – it’s also about remaining relevant. “Many founders are always thinking: What if the governance doesn’t want to support me? What if they want to get rid of me? They have these fears,” he said.

Cronje was just the opposite.

But it was even more than that. In mid-August he would appear with a few other DeFi luminaries on a livestream from Zapper, and said, “Where I want to get to is the point where I can completely remove myself from the ecosystem and it still functions, as per normal.”

YFI was his way to do that. [A small aside on the name: The official pronunciation is “wifey,” per the community (which helps explain the weeb memes), though Cronje told Erica Kang on YouTube that he conceived of it with the pronunciation “wi-fi.”]

He wasn’t even going to impose a pronunciation; even that was in community hands.

“If you want to do a proper exit to community then you have to be willing to exit,” Cronje told Shin. “If there’s a founder portion set aside, people expect the founder or the team to be responsible for it.”

It remains to be seen whether or not he ever really will fully step away from Yearn. 

When Cronje was still talking to me, he made a point of the fact that he still writes all the key code for Yearn, and he does the same on some of the shows cited here, such as on Shin’s podcast. 

It could be that he wants people to believe he doesn’t want to control Yearn when in fact he really does. Or perhaps a part of him really does want to relinquish control and move on, but another less outspoken part hasn’t quite let him do so yet.

Orphan block

CoinDesk first reported on the YFI distribution on July 20. It was the first I had known anything about Cronje, so I wrote about it with the same suspicion I write about anything that seems to blow up out of nowhere. That weekend I got a message about fears that too much money was going in and Cronje had complete control over it.

The furor happened to break out during one of the rare times Cronje was asleep. When he awoke, he quickly moved to turn the keys to the protocol over to a multisig to put everyone’s fears to rest, but he didn’t show sympathy for the fact that the exit scam was a movie that too many people had seen in this space before.

On FTX’s show, Tristan Yver would ask him what kind of advice he had for others who wanted to build DeFi products. He answered, “You have to hate yourself more than the stuff you build.”

DeFi moves at such a pace, he explained, that it demands total commitment. He said, “DeFi has made me neglect my life, my health, my sanity. I do have to put it first, and if you’re not willing to do that it’s going to break you.”

It seems to have come close. In early August, Decrypt reported he was on the verge of quitting. He would later disavow that interview on Shin’s show, but it should be noted that he had said basically the same things on the Zapper livestream:

This was a second flirtation with that doorway out.

Despite the industry’s rhetoric of decentralization, crypto is made of humans and humans always do the same thing: They look for leaders. If one doesn’t stand up, they mint one. Then they wrap their identities up in those leaders and they do what people do with leaders: they follow.

Bitcoin fixes this? Not so far. Ethereum definitely hasn’t fixed it. Chainlink embraces it.

Cronje has become much more than just another DeFi dev, even if he didn’t want to be. Now the DeFi degens follow him blindly, as a leader, when all Cronje wanted, as an artist, was for people to look.

Late confirmation

Andre’s ambivalence about this industry and its culture was showing, and yet also his addiction to the validation of his user base.

In September, on a livestream with Chainlink’s Sergey Nazarov, he would say, “People are making money in insane amounts and the reason they are making money in insane amounts is because we came up with a whole new Ponzi, which is governance tokens, where we give away, free worthless tokens that for some reason people buy and then the next wave comes in that buys that.”

The last few weeks I have wanted to rage-quit more times than I can describe.

And, of course, Cronje himself had built the most valuable governance token of all, a fact he is both well aware of and quite perplexed by. Whenever he’s asked to speculate on why it’s worth so much, he demurs.

But thanks to YFI, people have come to follow him less like soldiers and much too much like apocryphal lemmings. All had been quite good with Yearn in September, with total value locked ranging between $659 million and $959 million.

Cronje had started working on a gaming application called Eminence, which looked like it would be a collectible card game that used non-fungible tokens (NFTs). Cronje teased the game on Twitter and so fans started searching Ethereum for the code. Once they found it, users threw something like $15 million in without even knowing what it was meant to do.

As it happened, the day that Cronje’s maybe-NFT-based new gaming product got exploited I had posted a relevant story about the marriage of NFTs and DeFi, so the fact that Cronje was doing more with these tokens interested me as a way to further that narrative.

Over Telegram, I sent him a post from the blog Rekt about the exploit to ask more about what he was doing with NFTs. That’s when he wrote me back and only said, “I’m not building any more.” Cronje’s silent treatment began then, but nearly as soon as he returned history would repeat itself with some other smart contracts he had published to mainnet for a “discussion project” called Liquidity Income.

“The open nature of these systems is a double-edged sword. I have more thinking to do on this.”

Hodl

Nevertheless he’s shown no sign of departing since, with new projects underway such as Keep3r Network and Deriswap; Cronje even announced that Yearn would merge both with the aforementioned pickle farm and the sushi vampire attacker.

He may keep score in yield but not yield for himself. Like a gamer he wants to unlock new levels. Like an artist he wants to leave creations behind. Understood like that, Cronje’s talk of departure is more understandable; no need to wait for a payday if the fun comes to an end. (Azeroth, after all, is always waiting.)

Technologists often talk about the “stack” – how software gets built on top of software. The true bottom of that stack isn’t, say, TCP/IP – the bottom of every stack is people, and our software is more immutable than a smart contract on Ethereum. So far, you can’t even fork it.

We are stuck with us and that’s also who Cronje is stuck building for as long as he decides to keep building, just as he is stuck with himself as long as he wants apps built just the way he wants them.

That wetware software is why crypto has come so far, but life hasn’t really changed. As Cronje told Kang, “People always say that blockchain will revolutionize the world – no, it won’t.”