Andre Cronje The Lone Ranger’s Network Odyssey

Andre Cronje's Network Odyssey

“A very pale, chubby, nerdy child”

In the picturesque Cape Town, South Africa, Andre Cronje’s upbringing was different from others. Born into a traditional family, his father was a natural science teacher and his mother was a librarian. His older sister, Tanja, five years his senior, remembers him as a “sweet little brother” who loved animals and outdoor activities. Despite the occasional outside opinions that made Tanja worry, it seemed that these did not affect Andre’s childhood.

However, Cronje’s memories of his childhood are somewhat bitter. He described himself as “a very pale, chubby, nerdy child” who was bullied in a school that prided itself on sports. But it was in this environment that he found a way to isolate himself – programming. He began exploring the world of programming by creating small games like Hangman using the LianGuaiscal programming language. However, in his first computer science class, he already encountered a problem that he would often face in the future: no one could keep up with his pace, including the teacher.

The path of growth seemed to be not smooth sailing, but each stage laid the foundation for his future career.

Completed 3 years of computer science courses in half a year

When teenage Cronje entered Stellenbosch University to study law, he had dreams of arguing in court. However, soon he lost interest in the dryness and lack of practicality of law. The only exciting part of the course, the mock court sessions, made up a very small portion. This made him start reconsidering his future.

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Just as he was lost in the field of law, a chance encounter led him to the world of programming. At the time, his roommate needed to attend computer science classes at another training institution, the Computer Training Institute (CTI), and Cronje started providing him with transportation. Gradually, he became interested in computer science and started attending classes at CTI. Soon after, he decisively switched to the field of computer science and completed three years of courses in an astonishing half a year, eventually becoming a lecturer at the Computer Training Institute.

Over the next decade, he ventured into multiple fields, including telecommunications, big data, mobile security, and fintech companies, serving roles in software development and project management. Each project and role constantly honed his skills and broadened his horizons.

In 2017, the bull market of Bitcoin caught his attention, and he began to focus on blockchain technology. At this point, he was already an experienced software developer with a deep understanding of distributed networks. He started delving into GitHub repositories and cryptocurrency whitepapers in his spare time. Gradually, he became fascinated by the decentralized concept behind blockchain and the potential social changes it could bring. However, he quickly realized that the “token culture” in the cryptocurrency field seemed to place too much emphasis on transactions and financial elements, neglecting the value of technology and products. This situation disappointed him but also inspired his determination to explore more possibilities, laying the foundation for his future establishment of Yearn Finance.

Uncle in the Encryption Field

As the 2017 Bitcoin bull market came to an end, Andre Cronje’s life underwent irreversible changes. When his business partner temporarily left him to go on a honeymoon, Cronje began studying blockchain technology on his own, delving into whitepapers and GitHub repositories. He recalled, “If he hadn’t gotten married, hadn’t gone on a honeymoon, I might still be doing what I’ve been doing for the past five years.” This undoubtedly gave him an opportunity to delve into a whole new field.

In September 2020, in Laura Shin’s podcast “Unchained,” he recalled that the end of 2017 was a turning point because “that was the first time there were enough assets, enough protocols, enough tools.” Looking at his LinkedIn profile, Cronje appears to be older than most people in the cryptocurrency field, having studied law before learning to code. But once he became interested in coding, he quickly mastered the skill at an incredible speed and soon found a job in the communications field, becoming familiar with distributed (though not decentralized) systems.

When cryptocurrencies caught his attention, he started doing code reviews at Crypto Briefing and eventually joined an ICO-funded project called Fantom, a directed acyclic graph (DAG) blockchain project from South Korea. Even then, he felt frustrated with the “token culture.” He expressed his feelings on the YouTube show “Oh Hey Matty” in March 2019: “Too much time, energy, and capital are invested in tokens, rather than in the product, which, in the long run, benefits the tokens.”

However, he still accepted the challenge of helping people get more cryptocurrency tokens through encrypted tokens.

The Birth of iEarn

Cronje recalls that the initial intention of Yearn was actually quite simple. He had his own small stablecoin portfolio and was trying to manage it like managing a savings account. “90% of DeFi is figuring out how these protocols interact with each other.” His preference for stablecoins stems from his dislike of dealing with the potential permanent loss issues that come with non-stablecoin liquidity pools. For him, understanding the cryptocurrency market is too complex and risky.

On February 4, 2020, he wrote an article on Medium about launching iEarn (later renamed Y.Earn), describing how he personally had to bear thousands of dollars in costs to get it online. At the end of the month, he wrote again, describing the various obstacles encountered during the launch process. Despite facing various challenges, he found the process “very interesting,” with each challenge making the entire ecosystem more robust.

However, reality quickly dampened his spirits. One time, due to frontend issues, a user suffered losses after exchanging a large amount of assets. Cronje wrote an article titled “Building in #DeFi is Just Too Damn Hard,” honestly expressing his feelings: “To be honest, it’s just bad. It’s expensive, the community is very hostile, and users feel entitled.”

Facing continuous criticism from the community and unrealistic expectations from users, he felt immense pressure. Cronje realized that he did not want to become a “bank providing 24/7 technical and customer support”.

Yield Farming 101

In 2019, the cryptocurrency market was in a deep bearish phase, and everyone was only willing to hold stablecoins and wait for opportunities to buy at low prices. Thus, there was a significant demand for risk-free value appreciation of stablecoins. Initially, only currency markets like AAVE, Compound, and dYdX could provide lending opportunities for risk-free yields.

iEarn sparked a wave of excitement by implementing yield optimization automation. Through yield optimization, users could earn substantial income by lending or trading their cryptocurrencies within DeFi protocols, especially during times when cryptocurrencies were flourishing. However, this strategy, known as “yield farming”, could be labor-intensive in seeking returns.

Research firm Nansen found that most yield farmers abandoned protocols after only two to three days. Timing is crucial. The best yield farmers know exactly when to “farm” and when to move on to the next protocol. iEarn was able to automate this task by allowing users to pool their cryptocurrencies into smart contracts called vaults and rotating them among protocols such as dYdX, Aave, and Compound.

Subsequently, a liquidity incentive war began. Compound was the first to fire with its COMP token, and the battle for liquidity ensued. Balancer followed closely with BAL, mStable launched MTA, Fulcrum introduced BZX, while Curve was still waiting in the trenches for the unveiling of CRV.

But this made yield farming more complex, and simple profit-switching decisions were no longer sufficient.

In a subsequent iteration, iEarn was renamed Y.Earn (from ‘I earn’ to ‘You earn’), and a month after the release of COMP, Cronje wrote “Yield Farming 101” on Medium, excitedly explaining how yield optimization became more complex when stablecoin deposits also earned volatile growth tokens.

The liquidity incentive war led to a massive increase in locked funds in yEarn, but this was just an appetizer before the main course. What truly made yEarn a heavyweight was the release of YFI.

Fair Launch

Normally, project founders would reserve a portion of tokens for themselves, but Cronje’s approach was a groundbreaking change. He introduced the concept of “Fair Launch”, a token distribution method that did not reserve any initial tokens for himself. Scott Lewis, a member of the DeFi Pulse project, commented, “Andre invented a new way to launch a project without funding. He proved that as long as you build something, build a community, and use the revenue from what you built to fund the team, you can launch a DeFi project.”

On July 17, 2020, Cronje revealed his plan for his own growth token, YFI. Cronje’s reputation soared because he did not reserve any tokens for himself. On Yearn, anyone providing liquidity to certain pools had the opportunity to receive YFI tokens, with no pre-mining, no reservation, and no advance notice to insiders. One could argue that Bitcoin did the same thing, except it rewarded hash power instead of deposits, but it still boils down to contributing the resources that a particular project desires most.

Lewis said: “Dozens of projects launched by Yearn have been inspired to launch in the same way. The success of YFI has greatly reduced the barriers for builders to release their work.”

Kulechov, the founder of AAVE, said that team allocation is not only for extracting wealth from decentralized applications, but also for maintaining relevance. He said, “Many founders always think: What if governance doesn’t want to support me? What if they want to get rid of me? They have these fears.”

In just two months, TVL has grown rapidly to nearly $1 billion, and four months later, it reached an astonishing $7 billion, while the price of YFI increased by tens of thousands of times, reaching $40,000. This is a huge success.

Eminence Thunder

The success of YFI has made many people rich overnight, and the market has seen a concept sector related to Cronje, even a casual like on his Twitter can cause the rise of related currencies, and risks are also accumulating.

In September 2020, Cronje revealed a new Web3 project called Eminence, describing it as a DeFi protocol for game multiverse. The night before going to bed, he posted a vague announcement on Twitter (only an art picture, no hyperlink).

In the morning sunlight filled the room, Cronje woke up from his sleep and found a shocking news – although Eminence did not have a user interface or frontend, users had already deposited $15 million worth of DAI into the project. He couldn’t help but laugh, but there was bitterness in his laughter. Users found his open-source smart contract in the digital jungle and directly exchanged tokens into the contract.

However, the good luck didn’t seem to last long. At the same time, another user discovered a vulnerability in the code and stole all $15 million in funds. Cronje, with a sense of unwillingness, stared at the screen, his heart filled with contradictions. Shortly thereafter, the mysterious user returned $8 million to a Yearn finance contract. This made things even more confusing.

Eminence’s failure caused a huge wave in the community. Many people questioned and criticized Cronje’s decisions, and his incomplete and untested application caused losses to investors. He had hoped that Eminence would become a pioneering project that combines non-fungible tokens (NFTs) with trading card games. His love for games and exploration of new things prompted him to reveal information about the game on Twitter, causing fans to search frantically.

However, the sudden flash loan attack turned $15 million into nothing, and Cronje’s heart seemed to be pierced by the cold reality.

In a later article titled “Interpreting My Relationship with DeFi,” Cronje wrote, “The openness of these systems is a double-edged sword. I need to think more about this.” This seems to foreshadow his uncertainty about the future and his deep understanding and reflection on open systems. In the exploration and experimentation in the digital space, every step he takes seems to show us the infinite possibilities and challenges of the unknown world.

“We are giving away these worthless tokens for free”

In the ever-changing world of decentralized finance, Andre Cronje’s figure is like a shining star. His unconventional personality and unpredictable creativity have become topics of great interest. However, behind every hero, there is their unknown monologue, their unspoken confusion and anxiety.

In that turbulent September, Andre had a live exchange with Sergey Nazarov from Chainlink. In that exchange, he said earnestly, “People are making enviable wealth through the Ponzi scheme we invented, which is governance tokens. We are giving away these worthless tokens for free, and for some reason, people are willing to buy them, and then the next wave of people comes and buys the tokens of the previous wave.”

Clearly, Andre’s words reveal a contradictory mentality towards this industry and its culture, although he has made significant contributions with valuable governance tokens. He is well aware of this fact, and at the same time, he is confused by it. Whenever someone asks him why the YFI token has such a high value, he always chooses to evade the question.

His Twitter bio clearly showcases his approach: “I test in prod.” “Prod” here refers to the final stage of the software development lifecycle. After being polished and perfected in multiple testing environments, the code is exposed to the real usage environment in this stage. In these few words, Cronje summarizes his operating mode – he quickly builds software solutions to deal with the emerging challenges in the decentralized finance (DeFi) field, usually accompanied by warnings to the adventurous users of his projects.

He once expressed his philosophical thoughts in a tweet: “Disclaimer: When I build software, it’s for me. If you do want to interact with it, be careful. There will be bugs. The interface is to make my life easier. I will make mistakes. If you don’t understand it, don’t use it.”

In these few sentences, Cronje opens the window to his worldview and work philosophy. He is not a programmer bound by fixed rules. His purpose is clear – to solve problems, even if it means his methods may disrupt traditional software development principles. In his world, facing problems head-on and responding quickly is more important than spending time in a perfect testing environment.

Upon careful consideration, this approach is surprisingly consistent with Elon Musk’s five-step work method. Over time, each decision and action is like a piece of puzzle, converging into Cronje’s unique picture in the DeFi world. Each twist adds color to his legendary story, and each reflection becomes the driving force for his continuous progress. In the boundless digital realm, his journey is far from over.

This article is original content by @hiCaptainZ

Reference:

https://www.coindesk.com/markets/2020/12/08/andre-cronje-defi-expressionist/

https://medium.com/iearn/yield-farming-101-d983a27c542e

https://www.bitstamp.net/learn/people-profiles/andre-cronje/

https://www.dlnews.com/articles/web3/andre-cronje-the-rise-and-fall-of-a-defi-god/

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