Build your own Curve Farming strategies & more on Enzyme today!
Today, we’re pleased to announce that a selection of Curve pools are now available on Enzyme! This opens up new opportunities for Portfolio Managers within the Enzyme App to;
- Trade — Curve pools are known for their superior liquidity and minimal slippage because of the AMM algorithms they use. Say hello to large trades with almost zero slippage and low fees.
- Earn extra yield by providing liquidity — Adding liquidity to Curve pools allows for Vaults to hold and stake the pool LP token in their Enzyme vault. This opens up possibilities for earning both Curve trading fees, as well as earning any reward tokens that may be associated with that pool (e.g. CRV).
- Auto-Staking — The Enzyme contracts automatically stake LP tokens for users to ensure that they are alway getting the best yield.
- Claim Rewards and Re-deposit in 1 Click — Curve pools lend themselves well to yield farming strategies and we’ve tried to make that as easy as possible for you by bundling these activities into one transaction. Claiming rewards & re-investing them into the underlying Curve Pool is now possible in one click. Compound your returns on auto-pilot!
- Claim Rewards and Swap in 1 Click — Alternatively, you may want to claim your CRV rewards and swap them into another asset (eg. ETH) as part of your strategy. We’ve made that possible for you in one step too! You can now use the yield you generate via Curve to accumulate other assets, essentially at zero cost.
What is Curve?
The easiest way to understand Curve is to see it as a specialized exchange. Its main goal is to let users and other decentralised protocols exchange stable-coins (DAI to USDC for example) and various flavours of ETH through it with very low fees and very low slippage. Unlike exchanges out there that match a buyer and a seller, the behaviour of Curve is different: it uses liquidity pools (similar to Uniswap) to execute trades. To achieve this, Curve relies on liquidity (e.g. large pools of stable-coins or ETH) and rewards those that provide it. Whenever you deposit funds into a Curve pool you receive an LP token, representing your share of the pool. There is currently over $6 billion worth of liquidity deposited in the Curve protocol.
Curve is non-custodial meaning the Curve developers do not have access to your tokens.
What drives LP token APY’s?
Every time someone makes a trade on Curve.fi, liquidity providers (people who have deposited funds onto Curve) get a small fee split evenly between all providers. This is why you will see high APRs in Curve pools on days with high volume and high volatility. Because Curve pools are largely created in tokens with a very similar price to one another — the impermanent loss is often a non-issue which is an attractive quality. Essentially, the value of Curve LP tokens is only expected to go up over time.
But there’s more. Users providing liquidity also get access to CRV Reward tokens for providing liquidity to a pool. Depending on the pool, you may also get access to other tokens as a reward for your liquidity provision.
Why Use Curve via Enzyme?
Enzyme makes it possible to deposit to Curve pools and access these Rewards directly from the pools section of a Vault.
Running a farming strategy where you claim and re-invest CRV rewards has proven to be very successful in recent months. This involves claiming CRV rewards, selling them for the underlying assets and re-depositing them into the pool to compound interest.
Unfortunately, this is a very gas-intensive strategy and not possible or sustainable for most individuals. We’ve seen some solutions presented to this such as protocols pooling farming strategies together but they are often rushed to market at the expense of taking security seriously which has led to expensive security hacks. Typically, these pooled strategies will also charge high performance fees.
Using Enzyme to farm and re-deposit rewards on Curve allows you to batch execution with other like minded users and run the strategy on your own terms.
Enzyme never releases code without extensive testing and full security audits. Furthermore, any contract upgrades or changes are vetted by a highly technical Council of experts before being pushed through. This is not a security guarantee by any means but we do take security very seriously. This is also why we have such close relationships with insurers like Unslashed who value the efforts we make in this area.
As a Vault Creator, you no longer have to be a smart contract developer to build and monetize your own Vault. You can simply leverage the Enzyme interface and benefit from a suite of tools we have to devise and build your own strategy (eg. fee templates, whitelists, access to other protocols, risk management and more).
As a Vault depositor, you can share in the execution costs of these strategies with other like-minded people by joining strategies on Enzyme. You’ll also benefit from the overall transparency by having user friendly information on the interface such as performance history and stats, fee information and much more. Last but not least, you can do this whilst having full custody of your assets at full time and pulling the plug whenever you are not comfortable.
Which Curve Pools does Enzyme Support Today?
Today, we’re super excited to be going live with support for the sETH and AAVE pools with support for more to follow in the coming weeks.
sETH pool
The sETH pool is made up of ETH and sETH. Earning Curve trading fees on ETH is not very profitable today (0.25% APY). However, contributing to the ETH-sETH pool provides you with an opportunity to earn the 0.25% swap fee as well as the current 12.42% yield possible via farming CRV.
AAVE pool
The AAVE pool is made up of aDAI, a USDC and aUSDT and yields 11.34% today. On it’s own this doesn’t look too attractive vs lending stablecoin directly on Compound or AAVE (both integrations we support today!). However, coupled with the CRV rewards you can earn from this pool, the APY can exceed 20% and make it a worthwhile proposition.
Coming Soon!
We expect to be adding more Curve pools in the coming weeks. If you have any that you’d like to see — drop us a line here.
Note: Curve pool trading fees, as well as CRV incentives are variable and can greatly fluctuate from week to week. Also, Enzyme does not vote lock CRV into veCRV (i.e. no further boosting of Gauge rewards).
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