In this video, I tried to explained Curve War and 4pool. I used a lot of resources and they are listed down below. Another fun thing is how I pronounce “FRAX”. Please pardon me on that.
What’s a boy everybody now today we’ll be looking at understanding curve wall and fall pool and how 4boot will help to take flux and ust to the next level especially in the ethereum defy ecosystem so don’t chat about introducing the four pool now basically it is a liquidity pool containing four asset ust flux usdt and usdc they are currently on ftn and rb trump
The ethereum pool will arrive soon now to understand the impact of fall pool on usd and flux we first need to take a look at curve wall now to understand curve 4 we first need to understand curve now what is curve now curve is an amm just like a dex like your pancake swap sushi sword what’s so special about it is the algorithm that is using a typical dmn will
Use x times y equals k this is made popular by uniswork v2 and this works well for the majority of the asset because this formula runs on a supply and demand however it will not work well for stablecoin especially for large orders technically one usdt should get you close to one usdc so if you are using this same formula you will end up with a high slippage for
Stable coin so curve solves this problem by using a hybrid approach with two formula so number one will be x plus y equals k another one will be x times y equals k now this blue color line over here is the stable swap curve now when the liquidity pool is balanced the algorithm function as x plus y equals k so you can see the blue line mirror closely to the red
Dotted line this is also known as the constant sum formula now when the liquidity pool portfolio becomes imbalance then the algorithm will start to function as x times y equals k now you can see the blue curve starts to resembles the purple dotted line this is also the constant product formula now take a look at this example on sushi if you try to make a large
Order for stablecoin you will incur a high slippage 500k of usdt get you only 487k of usdc but on curved bound curve the slippage is much lower and you get closer to the full amount which is why whales love to use curve recording now that we understand what is curve we take a look at the curve wall now these are the pools on curve the most popular one here is the
Tree pool with a tbr of 3.3 billion now anywhere on if looking to swap for stable will use this because this is the most liquid and the commonly used stablecoin are in this pool now for a pool to work well you need two things you need liquidity and to draw liquidity you need to have rewards now for example the mempho it gives you crv rewards and it also gives you
Spell reward now crv is the native token for curve now we take a look at crv because it has this concept of ve crv so when you are a liquidity provider in curve you are earning trading fee and curve reward now you can choose to lock this up and in return you’ll get ve crv and with vcrv you get to vote in the pool that you are in to boost the reward so this will be
Like a cycle as the lp wants to learn more crv they will lock it up use the rights to boost their own pool and earn more crb now this can be locked for a period of one to four years at a 0.25 to 1 conversion ratio so for example locking one crv for one year will give you 0.25 ve crv and so on so now if you are a stablecoin protocol looking to push liquidity into
The ethereum device space you will need to set up a curve pool and you will need to bright or your own cell get crb to lock up so that you can boost the rewards for your own pool this way liquidity proof providers looking to earn more crv will start providing liquidity into your pool because they can earn more curve rewards or why not you ask the biggest holder
Of vcrv and ask them to vote for you now you need convex because currently they are the biggest holder of these crv so how complex works so convex allows crv holders to get boosted rewards so as a crv holder you can convert your crv to cvx crv now this cvx drb is one way once you convert you cannot change it back you can only do it by a secondary market so after
You convert you can stick it to get crv rewards this is because convect takes your crv and lock it and they use it to vote for gauges the rewards are then split with you now besides that you can also take your cvx and lock it for 16 weeks to have vlc vx and with vlcvx you get more rewards and also you are allowed to vote in the governance why would vr cvx holders
Vote for you because you are going to write them now volume is the protocol that allows other protocol to put in brights to bright the vr crv users now you can see that flux and ust are paying around 56 cent per vr cvx for the users to vote in their pool so this is the curve wall people are talking about protocols fighting to get more crv on hand either they buy
Or they bribe so that they can have more crv rewards going into their pool here you see flux and ust getting a pretty large chunk of next crv emission next we visit fourpool now fallpool is a partnership between ust flux usdc and usdt now remember that i shared with you the popular stablecoin pool and that was dye usdt and usdc so the number one goal over here is
To say bye bye to die because you remove die after equation but to make fall pool a success in curve you need to have rewards and terra and flux has been preparing for that now frax and terra are the two largest protocol holders of cvx they also provide two of the biggest volume incentive to the vl cvx holders together they can make the fall pool the most liquid
And utilize stable pool across the chain but not only them the partnership for four pools are crazy terraflex retracted badger olympus token reader coming together you can see that they can push a lot of cvx governance towards the fall pool so why are they doing this so tfl put out a proposal and give a good explanation but this is how i see after digesting all
The info instead of fighting why not work together usd refracts and also in this partnership ust becomes a collateralized asset for frax and take this opportunity to drive out die and have flex and ust to be a decentralized stable coin especially in the ethereum ecosystem where liquidity is the highest and the last reason will be to buy bitcoin particularly to
Tfl now let me explain on that we all know that lfg plan to buy 10 billion of btc but there is no such liquidity on the native power chain so having a deep liquid 4 pool ust can be swapped for usdt to make the purchases so dukhan associate that once they bridge bitcoin to terra they won’t be using as much of the curve i hope you learned something today on curve
Wall and the four posts all the resources i use are down in the description please help give a like and subscribe if this content brings you value thanks for watching and bye
Transcribed from video
Understanding Curve, Curve War and 4 Pool | CRV veCRV CXV UST FRAX By Crypto with Bosslee