Introduction
I propose the deployment of the Venus Protocol to the Ethereum Mainnet and immediately listing curve tokens crvUSD and CRV as collaterals and propose CRV/XVS rewards for the benefits of the Venus community, the Curve ecosystem and Ethereum.
Ethereum is where the most liquidity and capital is deployed and where big on-chain trades are happening. Curve is a cornerstone of DeFi: a leading AMM, having $1’8B TVL and a high quality stablecoin, which is able to keep a very close peg, crvUSD, sitting at $130M supply now.
In turn, Curve can help open pools with Venus assets like XVS and VAI, if available on Ethereum Mainnet. We can also help with this on BSC, once we deploy Curve on BSC.
Rationale
- ETH Mainnet needs more lending protocols
- Venus to be present on mainnet creates visibility and brand awareness
- Curve would like to be present in all lending protocols and create additional adoption for crvUSD
- Curve will be deployed to BSC, Venus Home Base. Some contracts are already deployed, and the UI will follow.
- Curve Stableswap is the leading AMM for stable assets like Venus VAI and the upcoming VAI yield bearing token
- Curve has a system in place where liquidity providers can get paid in crv tokens, this helps projects to manage incentives for the pools they need (for more info see the part about gauge below)
Details
1. Core Pool on Venus
List crvUSD and CRV as collateral and borrowable assets with the following caps. These caps and Collateral Factor/Loan to Value are only illustrative, for the risk adjusted caps we will be consulting our risk management partners expertise on this.
Supply cap 10M crvUSD and borrow caps of 9M crvUSD (Collateral Factor 75%)
Supply cap 5M CRV and borrow caps of 2.5M CRV. (Collateral Factor 35%)
2. Isolated Pools on Venus
crvUSD/CRV
List crvUSD and CRV as collateral and borrowable assets:
Supply cap 2.5M crvUSD and borrow caps of 2M crvUSD (CF 65%)
Supply cap 6M CRV and borrow cap of 3M CRV (CF 65%)
crvUSD paired with other stablecoins
List crvUSD/USDC/USDT as collateral and borrowable assets
Supply cap 5M crvUSD and borrow caps of 4.5M crvUSD (CF 80%)
Supply cap 5M USDC and borrow caps of 4.5M USDC (CF 80%)
Supply cap 5M USDT and borrow caps of 4.5M USDT (CF 80%)
VAI will be added if there is enough liquidity on mainnet.
3. Liquidity mining incentive for crvUSD to suppliers
We will incentivize this with 500’000 CRV and ask Venus to match this mining incentive with XVS to double the rewards. Details on which pool how much is spent have to be worked out.
Max TVL crvUSD with the above supply caps is ~$17.5 M. With the planned incentive this results in an APR of ~10% with today’s price of CRV/XVS and planned duration. We are aiming for 120 days right now, but may adjust to market conditions: the main objective is to reach an APR of around 10%.
4. Create Pools on Curve
Pools on Curve DAO are permissionless, so everyone can create a pool, but curve’s contributor will help to find optimal parameters for the following pools (And more if needed)
Create VAI/crvUSD pool on Ethereum Mainnet.
Create XVS/crvUSD pool on Ethereum Mainnet
Create XVS/VAI pool on Ethereum Mainnet
At the point Curve is deployed on BSC, we will help with any pools there too.
Apply for gauge
Every curve pool can have a gauge which can be deployed permissionless. To activate the gauge, a positive vote is needed from Curve Dao. Curves contributors can facilitate bringing this to vote, but the outcome is determined by the voters. Most of the time, a gauge is granted. Cases where gauge has been denied are rare, and mostly because tokens in the pool bear risk.
What is this gauge for
Gauges are used to emit CRV tokens for staked liquid provider pool tokens.
If Venus contributors or Venus owns veCRV or any other veCRV liquid token like sdCRV/CVX these owners can vote for the gauge, so liquidity providers get paid by the daily CRV emission.
This voting system allows projects to incentivize liquidity by paying it with CRV token, easing the sell pressure of their own project tokens. The resulting yield on the pool depends on the price of CRV. Owning voting rights in Curve
There are other ways to incentivize liquidity, either by bribing veCRV owners to vote for the gauge, or by adding a reward token to the gauge.
More info about gauge: Understanding gauges - Curve Resources
