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$CRV x $SNX cross asset multichain liquidity
Thread on how they solve Impermanent Loss for LPs while also enabling decentralized cross-chain swaps for traders
AMM innovation is heating up & they are competing directly with Bancor & Thorchain for volume on the major pairs
Thread on how they solve Impermanent Loss for LPs while also enabling decentralized cross-chain swaps for traders
AMM innovation is heating up & they are competing directly with Bancor & Thorchain for volume on the major pairs
Primer - The idea to use synths to power cross pool swaps originated late last year as a white swan event https://twitter.com/pythianism/status/1289228340721672196
Part 1 - Solving Impermanent Loss by offering single asset exposure to LPs
LPs who desire 100% price exposure to their chosen asset are able to provide liquidity to the sBTC or sETH pools on Curve
Their funds float between all assets in the pool based on what trades are made
LPs who desire 100% price exposure to their chosen asset are able to provide liquidity to the sBTC or sETH pools on Curve
Their funds float between all assets in the pool based on what trades are made
LPs are essential taking on the risk of both Curve's smart contracts & Synthetix's over-collateralization
in exchange for trading fees of the pool & $CRV rewards
Advantage over Bancor is that deposits do not need to be locked for 100 days to get full protection
in exchange for trading fees of the pool & $CRV rewards
Advantage over Bancor is that deposits do not need to be locked for 100 days to get full protection
The newest addition to Curve's Synthetix powered pools has been $LINK
LPs have been able to provide LINKies & receive between 21.25% - 53.11% APY
Expecting pools for the other major blue chips to pop up soon
Imagine the new demand for $CRV to boost
https://twitter.com/DeFiGod1/status/1368047540818546689?s=20
LPs have been able to provide LINKies & receive between 21.25% - 53.11% APY
Expecting pools for the other major blue chips to pop up soon
Imagine the new demand for $CRV to boost
https://twitter.com/DeFiGod1/status/1368047540818546689?s=20
Due to fee reclamation on synths, cross pool trades previously had to be split into 2 transactions
This meant @1inchNetwork was unable to tap into this liquidity
SIP120 changes this by allowing cross asset trades to take place in a single transaction https://twitter.com/kaiynne/status/1379558437332209672?s=20
This meant @1inchNetwork was unable to tap into this liquidity
SIP120 changes this by allowing cross asset trades to take place in a single transaction https://twitter.com/kaiynne/status/1379558437332209672?s=20
Part 2 - Enabling cross-chain swaps by partnering with @renprotocol
You can currently swap native BTC with sBTC / wBTC on Curve
As synth pools continue to grow, you will be able to trade from any liquid synth pool into mainnet BTC & vise versa https://resources.curve.fi/guides/swap-bitcoin-for-wbtc-or-sbtc
You can currently swap native BTC with sBTC / wBTC on Curve
As synth pools continue to grow, you will be able to trade from any liquid synth pool into mainnet BTC & vise versa https://resources.curve.fi/guides/swap-bitcoin-for-wbtc-or-sbtc
Now lets extend this further
This system works for any asset that is supported by both Synthetix & Ren
Prime candidates in my eyes are
sZEC / renZEC
sXMR / renXMR
sBNB / renBNB
sBCH / renBCH
sDOGE / renDOGE
Hope to see this vision turn into reality over the next few months
This system works for any asset that is supported by both Synthetix & Ren
Prime candidates in my eyes are
sZEC / renZEC
sXMR / renXMR
sBNB / renBNB
sBCH / renBCH
sDOGE / renDOGE
Hope to see this vision turn into reality over the next few months
The big advantage I see over Thorchain is that LPs are able to provide liquidity while retaining 100% exposure to the asset of their choice
I have never been a fan of 50/50 LP myself
If you are bullish on a coin - you do not want to constantly sell as price rises
Here's why
I have never been a fan of 50/50 LP myself
If you are bullish on a coin - you do not want to constantly sell as price rises
Here's why
Impact for $SNX
Stakers receive fees on all trades that route between Curve pools using synths
I expect an exponential growth in revenue as liquidity grows and aggregators start routing trades through these new pools
Stakers receive fees on all trades that route between Curve pools using synths
I expect an exponential growth in revenue as liquidity grows and aggregators start routing trades through these new pools
Impact for $CRV
veCRV holders receive fees on all trades within or between their pools
$CRV demand will also increase as more non-stablecoin LPs deposit & start locking coins to boost their rewards
veCRV holders receive fees on all trades within or between their pools
$CRV demand will also increase as more non-stablecoin LPs deposit & start locking coins to boost their rewards
Impact for $REN
renVM charges a fee on all cross-chain withdraws & stands to benefit as more people use Curve instead of CEXs for their cross-chain transfers
renVM charges a fee on all cross-chain withdraws & stands to benefit as more people use Curve instead of CEXs for their cross-chain transfers
Impact for #1inch
Ultimately liquidity will remain fragmented between protocols in the near future as AMMs compete to see which design works best
1inch can continue to gain a larger share of DeFi volume by tapping into all liquidity available to provide the best rate to traders
Ultimately liquidity will remain fragmented between protocols in the near future as AMMs compete to see which design works best
1inch can continue to gain a larger share of DeFi volume by tapping into all liquidity available to provide the best rate to traders
Vance with an extra reason on why the $SNX x $CRV x $REN model may be superior to what others are implementing https://twitter.com/pythianism/status/1384912684882272257
