Curve should create a new USD stablecoin liquidity pool that includes Gemini GUSD.
Abstract:
Details about GUSD:
GUSD is issued by Gemini Trust Company, LLC, a New York state based trust company. The fiat USD corresponding to issued GUSD is held by State Street Bank and Trust Company (NYSE:STT). Monthly accounting examinations are performed by BPM, LLP.
Liquidity:
GUSD was launched in September 2018 and for a time was one of the largest stablecoins with over $100M circulating at its peak. The circulating supply of GUSD has since declined as it was dwarfed by USDC, USDT and other stablecoins with wider trading and defi usage. The supply of GUSD is currently ~$10.5M, having grown from a trough of ~$4M at the end of 2019. GUSD can be exchanged for USD at a fixed 1:1 rate on the Gemini exchange. I have personally tested this out with good results: withdraw of GUSD from Gemini exchange was sent within 1 minute using fast gas, and deposit back into Gemini was credited within ~17 block confirmation.
I have submitted asset onboarding applications for GUSD to Maker, Aave, and Compound. If these applications are accepted, GUSD volumes and usage could increase considerably.
Motivation:
Adding GUSD could make Curve a focal point of arbitrage opportunities between Gemini and other centralized exchanges or DEXes. GUSD also has different custody and issuance companies vs other centralized stablecoins, so there are potential advantages for CRV holders and LPs from greater credit and regulatory risk diversification. Gemini/GUSD is also a functional on/off ramp to the ethereum defi ecosystem, so offering support could further cement Curve as the platform of choice for stablecoin trading.
For:
GUSD is a reputable USD stablecoin that is unlikely to become insolvent
Issued and custodied by different companies vs. TUSD, USDT, USDC, PAX (+HUSD, BUSD), potential to lower centralization risk to the protocol in the future?
Against:
Currently, GUSD has relatively low on-chain usage and liquidity
GUSD market cap is very low (~$10.5M), so this pool might have lower value for Curve
Polls:
Are you interested in a GUSD Curve pool?
Yes
No
0voters
What other USD stablecoins should be included in a GUSD Curve pool (pick up to 3)?
I’m against this proposal. GUSD has had issues with redemption. It’s not used anywhere except Gemini, which is already a small exchange. Don’t see what value it brings over the other stable coins (no new trading opportunities, small market cap, etc).
The only thing listing a GUSD pool would do is dilute LP rewards towards a useless stablecoin.
I can confirm there is no issue with redemption, it is only available through Gemini exchange, but it is extremely simple. You just deposit GUSD to your exchange address, and USD is added to your exchange wallet to trade or withdraw as fiat. When I tested this the USD was credited within 17 confirmations of depositing GUSD to exchange account (about 2x speed of industry standard 35 confirmations).
How should we think about which markets are too small to pursue?
Is a $100 million market cap big enough?
How about $10 million?
How about $1 million?
How about including PieDao’s BTC++ with its $660k market cap?
Where do we draw the line and decide a new market is too tiny?
FWIW - I think a key strength of Curve is its focus, and that in this case, we should let Uniswap or 1inch keep this minnow.
However, if there were some incentivizes for the pool, then maybe that might make it worth it.
I get it. Does curve contract about this function can be upgraded? In the future, many stablecoins need many pools, this will reduce trading efficiency.
@tylerwinklevoss are there reg implications for which coins we include in the pool? is there a subset where a integration/onboarding with you guys is easier?
The dilution of the rewards is not a real concern imo. If the pool is not properly populated with voting liquidity providers then it pulls absolutely no CRV from the rest of the pools.
The amount of CRV these liquidity providers would have to lockup is disproportionately larger than the boost requirement in larger pools. And they NEED to lock up CRV in order to vote for any rewards in the first place before aiming to lockup enough for the boost.
The introduction of small pools that could grow would therefore imo create positive price pressure that will benefit all holders through higher yield.