Sept. 17, 2021: A Factory on Every Chain ⛓️️🏭

Curve bringing true DeFi to all sidechains

So much going on this week in cryptocurrency, but we can easily separate the signal from the noise. This is it. This is the tweet:

For the layperson, here’s the TL/DR why this is the only thing that matters in DeFi.

Just yesterday we looked at how the Curve pool factory on Ethereum had become the destination de jour for maximizing yields. In terms of quantity, the flippening of Curve main pools by factory pools is imminent, (depending on how you tally the pools that got promoted from factory to the front page).

Although the quantity and rewards for factory pools are substantial, there’s relatively little volume still. Some user generated pools will be inevitably low quality. Others have a strong use case, like the CRV-cvxCRV pool and those connected with Fixed Forex, are starting to generate volume. As the use cases continue to creep in, one day maybe we’ll eventually see factory pool volumes flippen classic pools.

They’d have to first displace the mighty 3pool.

3pool has probably done more to support DeFi on Ethereum than almost any other smart contract address. The ability to maintain the peg of commonly used tokens offered DeFi users greater confidence stablecoins would remain stable. The capability to move value among like-priced tokens with low slippage enabled whales to easily test out new innovative DeFi offerings. It’s a major reason new chains commonly throw money at Curve to incentivize it to launch on their chain. As goes Curve, so goes DeFi.

So far, whenever Curve launched on a sidechain, Curve would deploy a version of 3pool and a couple other pools, then turn its focus back to Ethereum. The existence of a few pools on these chains was usually sufficient to bootstrap a decent DeFi infrastructure, commonly pushing Curve to one of or the top offerings on chain.

Yet Curve tended to stop there, so the Curve ecosystem on sidechains still lack the rich complexity of the Curve ecosystem on Ethereum.

Rolling out the factories to other chains could lead to an explosion of DeFi activity on all these chains. Curve team is too small and overworked to replicate the complexity of their Ethereum offerings everywhere. But regular users can now build this infrastructure for them. We’re already seeing factory pool creativity playing out on Ethereum.

On Fantom, where Curve launched earlier this year, only three pools had been launched by Curve over the course of several months. Two factory pools have already been launched on Fantom. Factory volume on Fantom may flippen classic Curve pools faster than expected.

We soon will see the community creativity building DeFi on Curve on every major chain. As Curve factories become the basis of a robust DeFi ecosystem, we might expect sidechains to move from incidental curiosities to major drivers of volume.

No surprise Curve has reclaimed the top spot on DeFi Llama.

If you understand the implications of what Curve factories across chains could lead to, then congratulations! You’re still early, and maybe GMI.


For more information, check out our leaderboards at https://curvemarketcap.com/ or subscribe to our newsletter at https://curve.substack.com/. All proceeds from subscriptions go to support crypto activism at PAC DAO. Nothing in our newsletter can be construed as financial or legal advice. Author is a $CRV maximalist.