"A very pale, chubby, bookish child"
In the picturesque city of Cape Town, South Africa, Andre Cronje's upbringing was unique. 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 occasional external judgments that worried Tanja, they seemed to have no impact on Andre's childhood.
However, Cronje's memories of his childhood are bittersweet. He described himself as "a very pale, chubby, bookish child" who was bullied in a school that valued athleticism. 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 Pascal programming language. However, in his first computer science class, he already encountered a problem he would often face in the future: no one could keep up with his pace, including the teacher.
The path to growth seemed challenging, but each stage laid the foundation for his future career.
Completing three years of computer courses in six months
When teenage Cronje entered Stellenbosch University to study law, he had dreams of arguing in court. However, he quickly lost interest in law due to its dryness and lack of practicality. The only exciting part for him was the simulated court sessions, which made up a small portion of the entire course. This made him reconsider his future.
Just as he was feeling lost in the field of law, a chance encounter led him into the world of programming. At the time, his roommate needed to attend computer science classes at 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 made a decisive turn towards the field of computer science and completed a three-year course in just six months, eventually becoming a lecturer at the Computer Training Institute.
Over the next decade, he ventured into various fields, including telecommunications, big data, mobile security, and fintech companies, serving roles in software development and engineering management. Each project and role polished his skills and broadened his horizons.
In 2017, the Bitcoin bull market caught his attention, and he began to focus on blockchain technology. By then, 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 becoming attracted to the decentralized ideals behind blockchain and the potential social changes it could bring. However, he quickly realized that the "token culture" in the cryptocurrency field seemed to overly emphasize trading and financial elements, neglecting the value of technology and products. This disappointment inspired him to explore more possibilities and laid the groundwork for his future establishment of Yearn Finance.
The Uncle of the Cryptocurrency Field
With the end of the Bitcoin bull market in 2017, Andre Cronje's life underwent irreversible changes. When his business partner temporarily left him for a honeymoon, Cronje began studying blockchain technology on his own, immersing himself in various whitepapers and GitHub repositories. He recalled, "If he hadn't gotten married and gone on a honeymoon, I might still be doing what I've been doing for the past five years." This was undoubtedly an opportunity that allowed him to enter a completely new field.
In September 2020, during 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 is older than most people in the cryptocurrency field, having studied law before learning to code. However, once he became interested in coding, he quickly mastered the skill at an incredible speed and soon found a job in the telecommunications field, familiarizing himself with distributed (though not decentralized) systems.
When cryptocurrencies caught his attention, he started doing code reviews for Crypto Briefing and eventually joined an ICO-funded project called Fantom, a directed acyclic graph (DAG) blockchain project from South Korea. Even at that time, he was frustrated with the "token culture." In a YouTube show called "Oh Hey Matty" in March 2019, he expressed his feelings, saying, "Too much time, energy, and capital are invested in tokens rather than products, and in the long run, products benefit tokens."
However, he still accepted the challenge of helping people earn more cryptocurrency through cryptocurrency tokens.
The Birth of iEarn
Cronje recalls that the initial idea behind Yearn was simple. He had his own small stablecoin investment portfolio and wanted to manage it like a savings account. "90% of DeFi is figuring out how these protocols interact," he said. His preference for stablecoins stemmed from his dislike of the potential permanent loss in liquidity pools associated with non-stablecoins. Understanding the cryptocurrency market was too complex and risky for him.
On February 4, 2020, he wrote an article on Medium about launching iEarn (later renamed Y.Earn), describing how he had to personally bear thousands of dollars in fees to get it online. At the end of the month, he wrote another article describing the various obstacles encountered during the launch process. Despite facing various challenges, he found the process "very interesting," and each challenge made the entire ecosystem stronger.
However, reality soon dampened his enthusiasm. One time, a user suffered losses due to frontend issues after exchanging a large amount of assets. Cronje wrote an article titled "Building in #DeFi sucks," honestly expressing his feelings: "To be honest, it sucks. It's expensive, the community is hostile, and users feel entitled."
Faced with ongoing community criticism and unrealistic user expectations, he felt immense pressure. Cronje realized that he didn't want to become a "bank" that provides 24/7 technical and customer support.
Yield Farming 101
In 2019, the cryptocurrency market was in a deep bear market, and people were only willing to hold stablecoins and wait for buying opportunities. This created a significant demand for risk-free yield on stablecoins. Initially, only currency markets like AAVE, Compound, and dYdX could provide risk-free returns through lending.
iEarn gained popularity for its automated yield optimization. Users could earn substantial income by investing their cryptocurrencies in lending or trading within DeFi protocols, especially during prosperous days in the cryptocurrency market. However, this strategy, known as "yield farming," could be labor-intensive.
Research firm Nansen found that most yield farmers gave up on protocols after two to three days. Timing was crucial. The best yield farmers knew when to "farm" in one protocol and when to switch to the next. iEarn automated this process by allowing users to pool their cryptocurrencies into a smart contract called the vault and rotating them through protocols like dYdX, Aave, and Compound.
Subsequently, a liquidity incentive war began. Compound fired the first shot with its COMP token. The battle for liquidity ensued. Balancer launched BAL, mStable launched MTA, Fulcrum launched 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 enough.
In a later 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 significant increase in locked funds for yEarn, and this was just the appetizer before the main course. What truly made yEarn a powerhouse was the release of YFI.
Fair Launch
Typically, project founders reserve a portion of tokens for themselves, but Cronje's approach was groundbreaking. He introduced the concept of a "fair launch," a token distribution method that does not reserve initial tokens for the founders. Scott Lewis, from DeFi Pulse, commented, "Andre invented a new way to launch projects without needing funding. He proved that you can launch a DeFi project by building something, building a community, and using the revenue generated by what you built to fund the team."
On July 17, 2020, Cronje revealed his plan for his own growth token, YFI. His reputation soared because he did not reserve any tokens for himself. On Yearn, anyone providing liquidity in certain pools had the opportunity to receive YFI tokens, with no pre-mine, no reserves, and no advance notice to insiders. It can be said that Bitcoin did the same thing, rewarding hash power instead of deposits, but it still boils down to contributing the most desired resources to a specific project.
Lewis said, "Dozens of projects inspired by Yearn have launched in the same way. The success of YFI greatly lowered the barrier for builders to release their work."
Kulechov, the founder of AAVE, said that team allocation is not just about extracting wealth from decentralized applications but also about maintaining relevance. He said, "Many founders are always thinking: What if governance doesn't want to support me? What if they want to get rid of me? They have these fears."
Within just two months, TVL (Total Value Locked) skyrocketed to nearly $1 billion, and four months later, it reached an astonishing $7 billion, while the price of YFI increased by thousands of times, reaching $40,000. It was a tremendous success.
Eminence Scandal
The success of YFI made many people wealthy, and the market saw the emergence of Cronje-related tokens, with even a casual like on his Twitter account causing a surge in related tokens. However, risks were also accumulating.
In September 2020, Cronje revealed a new Web3 project called Eminence, describing it as a DeFi protocol for a game multiverse. The night before going to bed, he posted a vague announcement on Twitter (just an artwork image with no hyperlink).
In the morning, as sunlight filled the room, Cronje woke up to a shocking discovery - despite Eminence not having a user interface or frontend, users had deposited $15 million worth of DAI into the project. He couldn't help but laugh, but his laughter was bitter. Users had found his open-source smart contract in the digital jungle and directly exchanged tokens into the contract.
However, the good fortune didn't last long. At the same time, another user discovered a vulnerability in the code and stole all $15 million. Cronje stared at the screen, his heart filled with conflicting emotions. Shortly after, the mysterious user returned $8 million to a Yearn Finance contract. This made the situation even more mysterious.
The failure of Eminence caused a huge uproar in the community. Many questioned and criticized Cronje's decisions, as his incomplete and untested application resulted in losses for investors. He had hoped Eminence would be a pioneering project that combined non-fungible tokens (NFTs) with collectible card games. His love for games and exploration of new things led him to reveal information about the game on Twitter, sparking a frenzy of searches by fans.
However, the sudden flash loan attack turned the $15 million into nothing, and Cronje's heart seemed to be pierced by the harsh reality.
In a later article titled "Decoding My Relationship with DeFi," Cronje wrote, "The openness of these systems is a double-edged sword. I need to think more about this." This seemed to indicate his uncertainty about the future and his deep understanding and reflection on open systems. With each step in the exploration and experimentation in the digital space, he seemed to be showing us the infinite possibilities and challenges of the unknown world.
"We're giving away these worthless tokens for free"
In the ever-changing world of decentralized finance, Andre Cronje's presence shines like a twinkling star. His unconventional personality and unpredictable creativity have become topics of fascination. However, behind every hero lies their untold monologue, their unspoken confusion and anxiety.
In that eventful September, Andre had a live conversation with Sergey Nazarov from Chainlink, during which he solemnly said, "People are making eye-watering wealth through a new Ponzi scheme we invented, which is governance tokens. We're 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 in and buys the tokens from the previous wave."
Clearly, Andre's words revealed a conflicting mindset towards the industry and its culture, even though he himself contributed highly valuable governance tokens to the field. He was well aware of this fact, and yet, he was perplexed by it. Whenever someone asked him why the YFI token had such a high value, he always chose to evade the question.
His Twitter bio succinctly showcases his approach: "I test in prod." "Prod" refers to the final stage of the software development lifecycle, where code is exposed to the real-world environment after multiple rounds of testing and refinement in various test environments. In these few words, Cronje summarizes his approach - he rapidly builds software solutions to address the constantly emerging challenges in the decentralized finance (DeFi) field, often with a warning to those adventurous enough to use 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, confronting problems and responding quickly is more important than spending time in a perfect testing environment.
Upon closer inspection, this approach is surprisingly consistent with Elon Musk's five-step work method. Over time, each decision and action becomes a piece of the 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 behind his continuous progress. In the boundless digital realm, his journey is far from over.
This article was originally written by @hicaptainz.
References:
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/