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
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This episode is hosted by Brian Fabian Crain.
