sCIP#27 - Adding a [aDai, aSUSD] Pool

Summary :

A proposal by the DefiDollar team to create a Curve pool for Aave sUSD (aSUSD) and Aave Dai (sDAI) stablecoins.

Motivation:

The proposed pool will be of particular interest to decentralization maximalists and users who want to hedge against any particular centralized stablecoin failing while also capitalizing on the following:

  • Trading fee from stablecoin price fluctuations.
  • Having Aave tokens instead of vanilla coins will maximize capital efficiency.
  • Capture the momentary upticks in yield of a particular underlying asset i.e. it is common to see Dai, sUSD, giving out 30%+ APR but only for a few hours.
  • Farm $CRV - may choose to lock it to gain voting power and boost.
  • USDT might collapse soon, any plans to make curve less reliant on it?

Relevance to DefiDollar ($DUSD):

DefiDollar is a meta stablecoin index backed by Curve LP tokens. It aims to provide the easiest way for users to store value in stable digital assets while accruing returns from the underlying DeFi Protocols. To that end, a protocol integration with a decentralized stablecoin pool was proposed earlier, however instead of a smart balancer pool, a curve pool will be more beneficial owing to a superior AMM for the said purpose.

Signal:

https://signal.curve.fi/#/curve/proposal/QmRiKc921PwtNsiu1yWfvRHngXCsvx2GheiMJqcGu6Kmqd

I don’t think this proposal makes sense in the context of current gas prices. A swap in the AAVE pool costs $50 at 60 gwei which means it will need to find deep liquidity to reach any significant volume.
sUSD liquidity is not abundant and it would be much better used in the sUSD pool which is gonna be the main pool used in cross asset swaps.

This pool would dilute liquidity unnecessarily, if there’s truly the need for a synthetic only stable pool then I would say we could consider a plain one.

5 Likes

Gas cost has dampened great many a things. That continues to be a problem. That said, having aave coins will enable users to earn yield even when there is a little trading activity in the pool. It will help bootstrap the pool, otherwise, attracting liquidity to this pool will remain a chicken and egg problem.

The target user is straightforward: Decentralization maximalists who want to diversify while also earning yield.

Just trying to be more capital efficient here.

As someone who really wants more pools that are NOT exposed to Tether, I like this idea. However, I agree with @charlie_eth that the gas costs really get in the way.

What about a DAI/sUSD pool and then we make a proposal for Aave to support the LP tokens? Then you could still get yield on them if you want, but it doesn’t get in the way of normal traders.

1 Like