End of Curve Wars: Going 4pool
written by @speicherx
The new proposal by TFL brings forward some measures to ‘increase UST presence across Ethereum and other EVM chains via a collaborative and mutually beneficial relationship with Frax Finance and Redacted Cartel’.
This comes with pushing a new 4pool into a dominant role on Curve alongside the Curve and Convex incentives — with UST, FRAX, USDC and USDT.
TLDR: Curve is a AMM that designed for efficient stable-coins swap with low price slippage, with LP yields accrued from the platform’s trading fees.
To ensure liquidity for optimal stableswaps, incentives for providing LPs are given via the liquidity mining programme — users get more CRV for depositing CRV, of which can be staked to receive veCRV. If you have been on Astroport, you may be familiar with the concept.
Users can run governance on which LPs should receive the daily CRV emissions — (hint for next paragraph with Convex: you will see similar systems coming on board Astroport with i.e Retrograde Money & Reactor in the making). veCRV allows governance over the pools which make up the protocol, more voted in on a LP bring higher rewards in terms of emissions.
Essentially: the longer you commit, the larger your voting power is and the more fees you collect. Users are incentivised to lock their CRV to vote for the curve pool that maximised their APY — controlling future emissions and inducing supply shocks.
However, it takes a lot of staked tokens to get maximum rewards. If you only have relatively small amounts, locking it up for ages doesn’t sound very attractive — vice versa.
Oh… so what about Convex? Fml, this is so dry!
Firstly IKR but: try to survive, I’m writing this on my last hour in the office for the day — trying to jumble up crap from my mind for a night read.
Championed as the winner of the Curve wars, Convex aims to bridge the gaps between the LPs and veCRV holders: providing additional flows of income and a more reliable exit mechanism. Convex basically adds as a booster.
Essentially, by pooling all the assets together (cough cough, retrograde money & reactor) — the platform can acquire more CRV, convert it into veCRV, then maximize boosts to all Curve LP token holders. Instead of directly staking CRV in Convex, users can stake cvxCRV in Convex & obtain 90% of the CRV income (charged 10%), but also provide users with other additional income including CVX. Users can easily trade it back to CRV in the cvxCRV-CRV pool, contrary to the lock-ups.
Additionally, users can stake their Convex tokens for vICVX: allowing them to obtain income and voting governance rights on Convex. vlCVX helps to capture the power of governance of CRV emissions. Can’t find an updated graph, but just quickly — this was a graph on how much veCRV supply sucked up by Convex, not too long ago.
So just quickly:
As worded by Ezaan here:
UST and FRAX directly competes against each other for CVX/CRV emissions through votium incentives and vICVX votes while they subsidise 3CRV pools. They are taking the move forward to growing the entire decentralized stablecoin pie and help create sufficient liquidity given that DeFi cannot follow through it’s cardinal rule of decentralization while using stablecoins that can be censored by any one entity.
So…
3pool: Consisting of DAI, USDC and USDT.
4pool: UST and FRAX have now chosen to stop providing liquidity to the 3pool. An alliance has been formed between UST, FRAX, USDC and USDT.
The Terra Community pool will also partner with Redacted for vlCVX power (they are the 3rd largest DAO holder of CVX). Redacted will vote for the UST-3CRV pool with their CV and move to vote for the 4pool, when it is on mainnet.
Wait… where did DAI go?
As incentives scurry away, I guess… GN? Moving on to other news.
1) GP Validator Update
The initial Galactic Punks Validator node has become inactive.
Due to an unidentified problem, multiple validators went down. The AWS node they were using crashed and wouldn’t restarted. They started a new node and deleted the old one that would not reboot — which contained the unbacked files.
The official docs mentioned to back up the validator keys, which they did. However, it did not mention that there are an entirely separate set of files that are needed for a validator to be restored in case of a node crash — which resulted in the validator note becoming inactive.
Following suit, official Validator Docs were updated to make the use of keys and other files clearer for the future. Any funds lost (minimal) from downtime were reimbursed in LUNA, even if it was a loss of over 10 cents.
NEW VALIDATOR NODE BELOW:
They are currently holding raffle giveaway contests (RT/like) on galactic_punks Twitter. To encourage redelegations & get into the active set, they are also currently running a raffle contest!
For every 10 luna redelegated/delegated to new validator = 1 ticket. For the next 3 days, 1 GP will be raffled and airdropped to a lucky ticket holder daily. It is 55 LUNA floor for one Galactic Punk now on RandomEarth.
2) OKX launches UST trading pairs
OKX Exchange announced the listing of more UST pairs i.e BTC/UST, ETH/UST, SOL/UST, AVAX/UST on their spot trading markets this week!
3) Laura Shin Unchained Podcast with Do Kwon
Do Kwon told Laura Shin on her Unchained podcast that ‘he is betting on the long-term growth of BTC price and isn’t worried about short-term volatility.’ Pretty damn good podcasts from her and Do Kwon as a guest, as always.
4) Proposal is live: bATOM as collateral on Anchor Earn
It’s finally here: wrapped stkATOM will allow holders to earn staking rewards while maintaining the liquidity of their staked ATOM. Liquid staking derivatives really do change the game.
End time for this proposal: Wed, Apr 6, 2022, 9:32:44 AM 39:47:40
So far so good!
That’s all for this week!
Feel free to add the TeFi calendar into your Google Calendar here: https://www.speicherx.com/tefi-calendar
I’m still tracking Terra NFTs daily, so minting dates are also added.
Feel free to join any of the Terra community groups I have created:
Singaporeans: https://t.me/sglunatics
Australians: https://t.me/australianlunatics
International (Chinese): https://t.me/terrachinesegroup
NFT: https://t.me/nftsinterra
