December 2, 2022: 3pool Too Cool 😎🏫

3pool activity drives leap in Curve trading volume

crv.mktcap.eth

Dec 02, 2022

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Join the live Llama Party at 9 AM PT — no guest of honor so expect a free-for-all.

Disclosure: Author has exposure to Curve pools containing assets referenced herein, including 3pool, MIM and bLUSD/LUSD3CRV. None of this is financial advice.

Tether GUD?

In one of the more unexpected narratives we’ve been tracking lately, it turns out the unexpected winner of SBF’s criminal fraud was… Curve trading volume?

DefiLlama.com @DefiLlama

Notable increase in Curve’s daily volume ever since FTX collapsed

The effect appears to be genuine — the great Blockworks research dashboard confirms this effect is due to an unexpected uptick in stablecoin trading volume:

For most of the past year v2 crypto pools (grey) had flippened stablecoin (blue) trading volume. Over the past month, the trend has steadily reversed course.

Moreover, it’s not just any stablecoin trading, but the effect is due to the trusty 3pool reasserting itself. Rumors of its obsolescence appear to be greatly exaggerated.

Just as this past May, the pool became massively imbalanced towards Tether when SBF’s criminal fraud came to light and FUD dropped. Whereas the pool rebalanced more gradually last time, the effect has been more sudden this time.

The namesake of the “Fiddy Indicator” also has been observing the situation. Unusually, a lot of this action is coming from a single address.

fiddy @_bout3fiddy_

USDC > USDT trader is now actively trying to pump. etherscan.io/tx/0x056650b5e…

As of December, balance not only returned…

curvecap.lens @CurveCap

⚖️ Balance is returning⚖️

…but now Tether is in fact underrepresented.

Browsing through many of the transactions over the past few days, it appears a lot of the volume is going through 1inch, though we haven’t conducted a rigorous breakdown.

The 3pool continues to find ways to cling to relevance. Simply sticking around for a long time, a lot of interesting other services get built atop it. Most recently, check the new mStable Meta Vaults built off 3pool:

mStable 🧮 @mstable_

We are officially releasing our Meta Vaults today, a composable vault architecture built on ERC-4626. yield.mstable.org

mStable 🧮 @mstable_

3/ The first Meta Vault strategy will be built on 3Pool Convex and Curve. Users can deposit USDC in one-click, which is then allocated to different curve 3Pool Metapools and staked on Convex. The strategy earns from liquidity token appreciation (trading fees) and reward tokens.

Pool Creator Fees

This is an interesting one… in the NFT space, there’s an incentive for people to create NFT liquidity pools because they can take trading fees for themselves. What about allowing Curve v2 pool creators to earn their own trading fees too?

Haowi kicked off the conversation.

It may require a few tweaks, otherwise users would toss up dummy pools for popular tokens. Fiddy suggested a pool manager responsible for ongoing maintenance of its parameters to optimize for profit.

fiddy @_bout3fiddy_

gov.curve.fi/t/proposal-to-… The idea needs refining, but there's potential. The proposal discusses pool creator fees: a portion of DAO fees going to pool_creator. But could we do better: pool_manager (PM)? Optimises for volume. Fee split: 50/30/20 (LP, PM, DAO). @HaowiWang

gov.curve.fiProposal to add the option of “creator fees” in factory poolSummary: Proposal to add the option of “creator fees” in factory pool. Abstract: It is proposed to support the option of “creator fees” by deploying new type factory pool. Motivation: The “creator fees” function of the NFT market encourages artists to sell their artworks through NFT. Artists ar…

Certainly an interesting idea, and a good incentive to get a longer tail of tokens onto the platform. Follow and join the discussion if you haven’t already.

Cockfighting

As we hunt for recessionary diversions, much of the crypto community has revived the ancient tradition of cockfighting. It’s been an absolute thrill to watch as Liquity’s Chicken Bonds turns into a gripping bloodsport.

Llanero @iamllanero

Latest check in on my @ChickenBonds. Over the past month, I've collected 60 data points across 5 different bonds and this is a plot of its growth toward break-even (blue) and rate of growth over time (red). 1/6

Liquity is now seeking a governance vote for their Curve pool.

Chicken Bonds (🥚, 🐔) @ChickenBonds

Llamas assemble 🦙 🤝 🐔 The vote to add a gauge for the bLUSD/LUSD-3CRV pool is now up. veCRV holders, do your duty here: dao.curve.fi/vote/ownership… And vlCVX appreciatooors here: snapshot.org/#/cvx.eth/prop…

snapshot.orgSnapshot

The pool was already streaming decent rewards in their native $LUSD, so passing the proposal could make the pool even more interesting.

Diligent Deer penned a thorough writeup of the mechanics for the great Crypto Risks Substack.

cryptoriskteam @cryptorisksteam

bLUSD-LUSD LP is providing a tempting yield and it may increase after the $CRV gauge approval. But what are the risks? @diligentdeer has covered risks associated with bLUSD-LUSD liquidity. A summarising 🧵 📜Article: cryptorisks.substack.com/p/asset-risk-a… 0/13

cryptorisks.substack.comAsset Risk Assessment: Liquity Chicken BondsChicken Bonds directs amplified yields to their bTKN (bLUSD). This report focuses on how safe is it for the users to utilise bLUSD i.e. bonding as well as providing liquidity in bLUSD-LUSD3CRV pool.

Though the report did not issue a recommendation on the particular gauge vote, it’s nonetheless critical reading before voters cast an informed ballot.