June 23, 2023: LP-fi 💽🎶
Silo, Vendor, and Gearbox usher in the era of Curve LP token lending
Let’s call these dulcet new tunes being dropped something like “LP-fi”
Since LSD-fi took off and brought staked Ethereum to the world of DeFi, composing Curve LP tokens as collateral was the next logical extension. Lend your Curve LP position… get some dollarcoins upfront to feed mi familia…
This week’s new Curve UI update, which shows clearly the pricing history of all LP tokens, has invigorated the notion that Curve LP tokens are innately useful as assets.
In the above case, TriCrypto is a bit like an index fund that tracks crypto markets with about a third less volatility. It’s a slightly wilder version of f(x) protocol’s creation of $fETH, intended to be stable except for about 10% of ETH’s volatility.
Of course, wherever there are assets with reasonably sized TVL, lenders are ready to serve. Three protocols have notably made big moves into Curve LP-fi this past week:
Silo Finance: Lend Curve v1 pools including stETH/ETH, LUSD/3CRV, Frax-USDC to earn Convex rewards, and mint ETH or XAI.
Vendor Finance: Liquidation-free, fixed term lending on Arbitrum, now supporting MIM-3CRV LP tokens
Gearbox: Currently going through governance to support lending v2 pool tokens including LDO/ETH, CRV/ETH, and TriCrypto
Lending is dangerous people, so we have to paywall this post for your own protection! But we know degens always crave the leverage because it allows for some amount of leverage. Below the fold we cover all three protocols’ use cases in more detail…