[CurveLP-stETH-ETH] MIP6 Collateral Onboarding Application for stETh-ETH LP Token
- Who is the interested party for this collateral application?
@elprogreso on behalf of the MakerDAO Community
- Provide a brief high-level overview of the project, with a focus on the applying collateral token.
Curve finance is a decentralized exchange platform focusing on swaps between like assets (stablecoins, wrapped assets, etc). The Curve AMM formula provides amplified liquidity around 1:1 ratio, which allows for larger trades with low slippage and better capital efficiency.
- Provide a brief history of the project.
Curve launched in the beginning of 2020 with USD stablecoin pools. Since then, Curve has moved forward and provided liquidity for other tokens. In January 2021, Curve began supporting the stETH pool–which is a liquidity pool that contains stETH and ETH, that allows Users to interact with these pools to purchase stETH, or ETH with low slippage. Any transactions that take place within this pool are paid out to liquidity providers via trading fees in CRV.
Why is the Curve stETH-ETH liquidity pool important? Without a liquidity pool for stETH, users cannot swap their stETH for ETH. This swapping between stETH and ETH effectively unstakes their ETH from the Lido contract. Without any liquidity pools, users will not be able to unstake their staked ETH until Ethereum launches Phase 2.
To incentivize liquidity for stETH, liquidity providers are rewarded for providing their tokens into the Curve liquidity pool. In this way, liquidity providers will be incentivized to keep Lido liquid, where users can decide to un-stake their ETH at any time for whatever amount.
- Link the whitepaper, documentation portals, and source code for the system(s) that interact with the proposed collateral, and all relevant Ethereum addresses. If the system is complex, schematic(s) are especially appreciated.
Curve whitepaper: Curve.fi
Lido architecture: https://blog.lido.fi/category/architecture/
stETH/ETH Curve Pool token contract: https://etherscan.io/address/0xDC24316b9AE028F1497c275EB9192a3Ea0f67022
Additional Domain Work Performed:
- Link any available audits of the project. Both procedural and smart contract focused audits.
Audits: Lido by Quantstamp
Audits: Lido by MixBytes
- Link to any active communities relating to your project.
Discord: Curve Finance
Twitter Lido: https://twitter.com/LidoFinance
- How is the applying collateral type currently used?
CurveLP-stETH-ETH is a source of liquidity for trading between stETH and ETH. Users can deposit one or both assets to the pool in exchange for LP tokens, and earn a portion of the fees charged on trades. LP tokens can also be staked in Curve’s gauge contracts to earn inflationary CRV token rewards.
- Does one organization bear legal responsibility for the collateral? What jurisdiction does that organization reside in?
Curve LP tokens are permissionless assets, no party bears legal responsibility for the asset.
- Where does exchange for the asset occur?
CurveLP-stETH-ETH can be exchanged for underlying assets (in ETH and stETH) directly via the Curve finance, Uniswap v2, and 1inch Liquidity Protocol contracts. ETH (Ethereum) is traded on a wide variety of centralized and decentralized exchanges. Balancer has also released MetaStable Pool launch, for stETH-ETH liquid staking. For more information regarding the co-incentivised pool, please read this Medium article.
- (Optional) Has your project obtained any legal opinions or memoranda regarding the regulatory standing of the token or an explanation of the same from the perspective of any jurisdiction? If so, those materials should be provided for community review.
- (Optional) Describe whether there are any regulatory registrations for the token and provide related documentation (including an explanation of any past or existing interactions with any regulatory authorities, regardless of jurisdiction), if applicable.
- (Optional) List any possible oracle data sources for the proposed Collateral type.
- (Optional) List any parties interested in taking part in liquidations for the proposed Collateral type.
Disclosure: I have financial interest in some of the tokens mentioned. This collateral application is for informational purposes only, and does not constitute advice of any kind. You should not construe any such information or other material on this MIP6 Application as legal, tax, investment, financial, or other advice. Nothing contained, or written on this MIP6 Application constitutes a solicitation, recommendation, or, endorsement.
Copyright and related rights waived via CC0.