sCIP#36 - Add CRV/sCRV pool

Summary:
Having a CRV/sCRV pool enables people to trade large quantities of CRV without experiencing slippage. It also allows a non-locked way for people to gain return on their CRV tokens whilst staying within the Curve ecosystem.

Abstract:

This proposal would add a CRV/sCRV pool to enable people to enter or exit Curve DAO token positions via Synthetix.

Motivation:

The first exclusively ‘synth’ pool Link/sLink has been a great success, attracting $210 million of liquidity and expanding the range of assets Curve manages. CRV is the logical successor to this pool as it is a common desire for liquidity providers to buy large amounts of CRV in order to lock it for the boosted returns. Trading via Curve x Synthetix enables slippage free large trades and a direct route to and from stablecoins to CRV.

For:

Give a native alternative to vote locking CRV

Increase trading volume and generated fees.

Against:
If added to the Gauge it will dilute current rewards allocated to other pools.

Possible smart contract exploit risks from Synthetix price oracles (unlikely as they use Chainlink and no new methods are being used for sCRV).

Poll:

https://signal.curve.fi/#/curve/proposal/QmR6YCff9KeZjbnEs4kdGRpneya7DbMvbSz7H2XULykVKS

9 Likes

The biggest “against” here is that this is a very Ponzi component. E.g. we don’t want to end up in a situation where everyone votes for sCRV/CRV pool which takes out all the liquidity, and yes, price goes up for a short time, but the whole thing dies after.

That being said, veCRV holders are invested for a long time, so they should understand such a risk.

2 Likes

There are reasons why this we may want to skip this altogether :wink:

3 Likes

Why would we end up in that situation though? It’s not like all big LPs are going to just shift all their veCRV power over to the CRV/sCRV pool when they have high boost locked in on other pools, I certainly won’t be doing that.

I can’t see a long-term downside of having high liquidity on Curve for CRV to attract institutional players. We certainly don’t want them paying those high trading fees/slippage on Coinbase or Binance when they can come to us.

Secondly, if this pool launches, the community can redirect the 24m CRV from SIP#55 to provide liquidity on this pool, instead of putting the CRV on AAVE where VSc and other big traders can borrow cheap CRV to short and dump.

3 Likes

Also, the big vecrv holders almost by definition have their CRV locked up for ~4 years. They’re not able to take advantage of voting big on CRV/sCRV and creating ponzi dynamics unless they also happen to have a huge stockpile of unlocked CRV.

Could the ponzi concern be mitigated with a gauge weight limit on this pool? Or potentially no CRV rewards gauge at all.

Even without CRV rewards, it would still be a good way to earn some yield on CRV (w/o a super long lockup or IL) through trading fees. I feel the advantages of deep CRV liquidity through Synthetix and capturing these trading fees for LPs/veCrv holders vs losing them to Uni/SushiSwap + centralized exchanges only benefits the Curve ecosystem.

1 Like

Can you explain? It seems like a no-brainer to add the pool. I’ll concede that whether adding CRV gauge rewards is a good idea is up for debate.

1 Like

I also don’t get the ponzi argument, can someone ellaborate?

  • major veCRV players pump sCRV gauge weight.
  • same players flood pool with CRV to earn more CRV
  • gauge weighting on other Curve pools go down
  • liquidity leaves in all pools except sCRV
  • everyone farming sCRV for CRV until ponzi breaks

I dont think this is plausible. veCRV should have a long term mentality that incentivizes growing volume and fee collection, but maybe I overestimate people idk

4 Likes

That seems a little far fetched to be honest.

Anyway, i see the vote is already overwhelmingly yes and quorum is met so it’s happening, the question now is how long it usually takes from that vote to execution?

1 Like

Why not give the reasons instead of leaving them for others to assume? Someone even asks for an explanation and you ghost em. What is the point of a forum?

1 Like

I think the purpose of the protocol right now is to drain circulating CRV supply. If we are having the CRV pool, we may still suffer the excessive supply further. I may need to disagree with this proposal

Reason will be made public in the near future.

The pool has good support, support for a gauge is another thing of course

1 Like

Looking forward to reading it.