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Ahead of the Curve - November '24

Curve

• 10 min read
Ahead of the Curve - November '24

In a month full of treats, one of the sweetest came on Halloween, with news that Gauntlet is providing incentives on behalf of a cbBTC/WBTC pool. Otherwise, Curve was up to plenty of tricks throughout the month.

The $crvUSD receiving a new Peg Keeper, as $USDM replaced $TUSD. This is a yield-bearing stablecoin from Mountain Protocol, which earns from Treasury Bills. More details are available here: https://news.curve.fi/crvusd-adds-usdm-pegkeeper/

CrvUSD Adds a New PegKeeper
The Curve DAO has approved and implemented a major governance proposal to integrate Mountain Protocol’s USDM stablecoin into the crvUSD PegKeeper system, establishing a 10 million crvUSD debt ceiling. The proposal was executed on the 23rd of October. This marks a new expansion of Curve’s crvUSD ecosystem, where PegKeepers play
Curve.fi NewsSaint Rat

Incidentally, if you are interested in seeing the Peg Keepers in action, the UI has been updated to track Peg Keeper status changes automatically, even allows observers to claim profit by calling the update function.

Development

As always, Curve devs have been busy. October saw the results of several audits. The Curve Fee Splitter received a full audit from ChainSecurity. The Fee Splitter is a crucial part of the upcoming plan to launch scrvUSD (which earns a natural saving rate). ChainSecurity praised that “the codebase provides a high level of security.”

Smart Contract Audit - Curve Fee Splitter - ChainSecurity
Curve implements fee splitter to distribute fees (in crvUSD token) from the crvUSD stablecoin markets to different recipient according to configured weights. Read the smart contract audit by ChainSecurity.
ChainSecurity

The codebase is notable for using the new Vyper 0.4 module system, which means that some Snekmate code was covered within the scope of the audit.

The actual scrvUSD contracts were not included in the audit, because they are a fork of the audited and battle tested Yearn v3 vaults.

yearn-vaults/contracts/Vault.vy at master · yearn/yearn-vaults
Yearn Vault smart contracts. Contribute to yearn/yearn-vaults development by creating an account on GitHub.
GitHubyearn

For more details on the business case of scrvUSD, check the following post:

The other major audit released this past month was the MixBytes audit of Curve's lending platform, known popularly as Llama Lend. The audit was also favorable, and covered multiple snapshots in the development history. We recommend to read through the full audit yourself:

Oct. 8, 2024: Audit Trail - Llama Lend 🕵️👣
Curve’s permissionless lending markets survive audits and prod
crv.mktcap.ethcrv.mktcap.eth

Lending

Llama Lend contracts were deployed to Optimism and Fraxtal last month. This month the various gauges and integrations got connected to bring the markets to life.

Curve has already become a powerhouse on the Fraxtal chain, hoovering up 2/3 of the chain's TVL.

The game now turns to how to best drive liquidity to the various Llama Lend pools across the four chains. Curve's Martin Krung has been experimenting in public with a script designed to optimize incentives to grow lending markets over the course of two months, using 5000 ARB received from a grant to bootstrap the tBTC/crvUSD lending pool.

Other protocols are using points programs to draw users.

The new YieldNest vault is the first to try offering points to both borrowers and lenders as part of their "Seeds" rewards program.

At the moment, Llama Lend vaults are occasionally seeing elevated APRs for lenders.

For more details on how to integrate fully with Llama Lend on the developer side, Curve provides Github and video tutorials:

Pools

When it launches, scrvUSD will not be the only yield-bearing stablecoin in DeFi. Multiple such stablecoins have become popular, and many more are launching, which could serve as natural pairings for trading pools. A narrative to keep an eye on lately has been that pools containing yield-bearing stablecoins natively draw very good trading activity.

While the effect is pronounced among yield-bearing stablecoins, a variety of other Curve pools also continue to experience high native trading APYs in the era of more NG pools being launhced.

The phenomenon of elevated trading yields can occur for many reasons. For instance, the pufETH/WETH pool may be benefiting due to high gas fees.

Other pools do well even when they are not yield-bearing.

Some further interesting pool activity we noted from the prior month, if we missed any make sure to drop them in the comments and we'll update:

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For the last case, defi.money is running an airdrop for veCRV holders via their points campaign.

What's the best strategy for bootstrapping deep liquidity? It remains an open debate, but the community has some thoughts:

Many strategies for bootstrapping liquidity exist. At the end of the day, liquidity is not useful if it does not lead to facilitating trading. Fortunately, Curve is seeing increasing integrations with aggregators, leading to great trading volumes.

Cross-Chain

The EYWA CrossCurve ecosystem is ramping up, which promises to facilitate native cross-chain trading for Curve assets across several chains. Worth keeping tabs on their progress.

Curve hosted a hackathon over the past month to find a team to bring Curve to the TON ecosystem. The results were livestreamed:

Safety

DeFi remains a minefield for hacks and scams. Over the past month, Curve spent a lot of time fighting to get a fake app taken down.

We can now point to some tangible evidence that Curve's insistence on using Vyper may correlate with safety.

The Curve grants committee recently provided 250K $CRV tokens to Vyper to help fund its development. Read more on the language's progress here:

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