Create LSD pools on Llamalend e.g. stETH/ETH (non crvUSD)

Proposals
#1

Summary:

Create LSD pools on Llamalend e.g. stETH/ETH

Abstract:

Llamlend and crvUSD is a huge revenue source for Curve. DeFi users mainly borrow $. However some DeFi users are using leverage strategies using LSD around difference of yield between Liquid Stake Derivate and borrowing native chain token (e.g. ETH…).
Sometime, there is a depeg between on LSD stETH vs ETH on secondary market, there could be on opportunity for Llama lend to solve the depeg problem with the soft liquidation algorithm.
There is a market already available on DeFi Saver.
DeFi Saver

Motivation:

This proposal would increase revenues and TVL to the DAO.

Specification:

to be discussed , stETH , rETH,

For:

New revenues streams, new pools, listing of small market size LSD token.
Possible application on new markets with small LSD borowing / lending : stBNB/BNB , stAVAX/AVAX, stMATIC/MATIC, stFTM/FTM …

Against:

Time required for implementation, market too small for Curve

#2

dear @michwill

Curve Lend could do a better design than Compound where the 3 LSD stETH,rETH, cbETH have the same parameters and same LTV

https://app.compound.finance/markets/weth-mainnet

Moreover in order to bootstrap, LSD curve could ask for LIDO, RPL and other LSD providers SD, Ankr some token

This leverage loops could use
1 Llamalend
2 curve DEX => swap ETH to LSD in curve pools
3 Deposit again in Llamalend

More fees for Lend and more fees for DEX

#3

That means rewriting LlamaLend a little bit. But yes, I see the point.

Its not the matter of “creating a pool” or “voting”. Need to write a way of taking admin fees properly. Right now Llamalend takes no admin fees to simply work as a crvUSD supply sink (the system makes money this way)

1 Like
#4

Thanks @michwill

There is still some interest for this kind of lending pools
Aave have around 1/3 of its TVL in this kind of leverage ETH (and is distributing GHO for stETH/ETH leverage users).
The same pool on Compound has around 130M in TVL.

Moreover with LlamaLend design, Curve could target leverage crypto/crypto positions e.g. (with is better for leverage due to lower volatily).

  • WBTC/ETH Long/short
  • ARB/ETH Long/short
  • OP/ ETH Long/short (if Llamalend is launched on Optimism)

Curve could root the volume on tricrypto pools
USDC/WBTC/WETH for WBTC/WETH pair
and crvUSD/ARB/CRV x crvUSD/WBTC/WETH for ARB/ETH pair