sCIP#35 - Add a [LUSD, [3Pool]] Metapool

Summary:

This proposal would see the addition of the [LUSD, [3Pool]] Metapool to the Curve UI.

Abstract:

LUSD is a fully decentralized stablecoin backed by ETH as collateral. It is generated when users open a Trove in the Liquity system and borrow against their ETH (akin to MakerDAO). All Troves must maintain a minimum collateral ratio of 110%, ensuring that LUSD is sufficiently backed by collateral.

Motivation:

After launching on April 5, 2021, Liquity has attracted an >$450M TVL and counting, while LUSD has grown to a supply of >250M. So far, liquidity has been increasing on the LUSD:ETH Uniswap pair, but we expect that users would be especially interested in the LUSD:3Pool, yielding another profitable opportunity for Curve users and increased revenue for veCRV holders.

With demand for LUSD increasing, the ability for user’s to acquire it directly (without eating too much in fees) will become important — as mentioned by some Curve users. Since the pool is already deployed and seeded with initial liquidity, it seems like an ideal time to encourage its use while Liquity continues to grow. Especially we see increased interest in Liquity’s built in rewards.

Specification:

● LUSD is a fully decentralized stablecoin backed by ETH as collateral.

● LUSD maintains its peg through direct arbitrage opportunities. LUSD’s price floor of $1.00 is protected through a redemption mechanism. At any time, an LUSD holder can redeem LUSD against the system such that 1 LUSD = $1 of ETH. When LUSD is redeemed, it is used to pay off the debt of the riskiest Troves in the system in return for their collateral. When LUSD <$1, this is a profitable opportunity. Its price ceiling is protected by low collateral requirements, since a borrower can take out a loan at the 110% minimum and sell their LUSD on the market.

Poll:

https://signal.curve.fi/#/curve/proposal/QmfK8iK2w4fA9FcHn6HDPRyQSzq7wQQL81Z31bKijuowrw

7 Likes
7 Likes

Can’t wait to see crude becoming more interesting and bankless

What are the requirements for a listing, by the way? Anyone can list on Curve Factory, right? And then certain requirements allow it to be on the main website?

Correct, yes.

Requirements here