Brian Fabian Crain and Michael Egorov, Curve Finance founder, discuss Curve's origins: solving inefficient DAI/USDC swaps after MakerDAO borrows by creating a DeFi AMM for stablecoins and LSTs.

It hit 1M TVL with a bonding curve concentrating liquidity at 1:1, more effective for pegged assets than Uniswap. Features grew to include BTC wrappers, stETH pairs, and crvUSD (a CDP stablecoin with reversible liquidations & a peg-keeper).

Governance uses veCRV: Locking CRV grants voting power proportional to lock duration, a mechanism now refined in Yield Basis.

Yield Basis solves impermanent loss in volatile pools (e.g., BTC/crvUSD). Users deposit BTC; the protocol borrows crvUSD, pairs it at 2x leverage (50% debt/equity), and uses LP tokens as collateral. This gives 1:1 asset tracking, while fees accrue from auto-rebalancing arbitrage.

Simulations show 20%+ APY (may decline as BTC volatility drops) under a $50B TVL cap. It complements Curve by directing veCRV incentives to crvUSD pools, enhancing liquidity, fees, and DAO revenues. Key considerations: manual migrations, deterring forks, and dev support to scale.

Topics Discussed

00:00 Introduction to Curve Finance and YieldBases
02:24 Understanding Curve's Unique Mechanisms
07:58 The Concept of veTokenomics
15:27 Lessons Learned from Building Curve
22:20 Exploring YieldBasis and Its Innovations
29:47 Understanding Yield Basis and Collateralization
32:25 Navigating Market Volatility and Liquidation Events
35:32 Metrics and Performance Insights of Yield Basis
38:35 Scaling Yield Basis: Future Directions
40:33 Yield Expectations and Market Dynamics
43:12 Potential Growth and Liquidity Challenges
46:18 Expanding to Other Chains and Governance Tokens
49:35 The Symbiotic Relationship with Curve
54:31 Upcoming Milestones and Future Developments

Links Mentioned

Sponsors

Gnosis: Building decentralized infrastructure since 2015. With Gnosis Pay, the first Decentralized Payment Network. Start leveraging its power at gnosis.io

This episode is hosted by Brian Fabian Crain.

Red ball, pink ball, who gives a s***, with Isa Guha

The Grade Cricketer

Ad break

The AI-powered Podcast Player