• © Goverland Inc. 2026
  • v1.0.3
  • Privacy Policy
  • Terms of Use
StabilizeStabilizeby0x63Dbf00C99EaD0635FF5aDf2fd2f1F7F2141fc7C0x63Db…fc7C

Should we open liquidity providing pool(s) (curve) with stabilization feature?

Voting ended over 5 years agoSucceeded

Upfront, Its necessary to know that Curve allows single sided asset deposits for liquidity providers, while the pools can contain 3 or 4 different stablecoins. Depositing certain stablecoins into curve pools which are in demand by an imbalanced pool is already incentivized by curve finance by giving the depositor a small bonus on the received LP tokens. With this feature Curve incentivizes the user to improve the balance between the amount of the different stablecoins in the pools, for example between Dai, ISDC, USDT and sUSD in the sUSD curve pool.

However, this incentive is too small to really attract deposits for a token which is in demand, which is easy to see at the imbalance of the pools. For example, the above mentioned sUSD pool has at the moment of writing only a 15% share of Dai, while it should be 25%. And it has been in the single digits already recently. From a bigger perspective, the whole market will probably have a shortage of a coin which is in demand to balance a pool, and therefore also it`s price will be above its aimed peg due to the demand. This deviation from the peg is the second issue to be solved, on which the Stabilize Project already puts his focus on.

What Stabilize could do to solve the 2 issues and take advantage of them to create value, is to amplify and improve the incentivization feature of curve by building a Stabilize LP-provider pool on top of curve finance. As an example - this may be applied to any Curve stablecoin pool - one Stabilize LP farming pool could be created, in which users can deposit the different stablecoins Dai, USDC, USDT and sUSD singel sided into the sUSD curve pool.

A fee could be taken off the stablecoin deposit and withdrawal amount which is dependent on how much the deposited Stablecoin differs from it`s peg, similar to the suggested stabilization incentive for privacy pools (tornado): At the deposit the lowest fee is taken if the coin is far above its peg. At the withdrawal the lowest fee is taken if the coin is at or below its peg - and the other way arround. This would give users a further advantage for supplying a stablecoin that is in demand of the pool, and to withdraw stablecoins of which the pool has too many. And, of course, this will help to bring the stablecoins closer to their peg.

For the User, there are several income streams arrived from the aimed and most incentivized behaviour: -He gets more stablecoins due to the arbitrage trading (price difference between the coins, or the time dependent price difference of a coin) -He gets more stable coins from the curve pool fees (APY of a few %) -He gets the deposit bonus from Curve when depositing demanded coins -He can lower the pool fees to almost no costs when he enters and exits the pool at the right price level. -He farms STBZ as long he is in the pool

For Stabilize protocol, the following value gain can be realized from such a pool: -When entering and exiting the pool, the user payes a peg dependent fee to the treasury, like 0.5 to 0.01% -The farmed tokens which derrive from the curve pool, like SNX and CRV tokens, are going into the treasury of Stabilize. The user gets in exchange basically the STBZ tokens he farms, which carry the intrinsic value of the farmed tokens since STBZ can be burned into the treasury.

Further, Stabilize will bring value to the ecosystem by improving Curves balance issues, and by actively supporting the balance of supply and demand of stablecoins and stabilize their price.

Off-Chain Vote

Yes, please develop liquidity providing pool(s)
0 0%
No!
0 0%
Download mobile app to vote

Timeline

Oct 17, 2020Proposal created
Oct 17, 2020Proposal vote started
Oct 18, 2020Proposal vote ended
Jan 23, 2024Proposal updated