MPG-0┃ Migrate PAR liquidity incentives on Ethereum to Curve

Summary:

We propose to migrate the PAR liquidity to Curve to have a better liquidity on the PAR on Ethereum.

Context:

Curve is a decentralized automated market maker launched in January 2020 with the aim to have an on-chain forex by using concentrated liquidity ranges. The V1 of Curve only allows users to create pools with pegged assets but in June 2021, Curve launched V2 Pools which allow users to have concentrated liquidity on non-pegged assets. According to DefiLlama, Curve is now the DEX with the highest TVL in the DeFi ecosystem and a lot of protocols are currently moving pools to Curve.

The most efficient DEX on Ethereum was Balancer for non-pegged assets, however today Curve provides better swap rates for pegged and non-pegged assets. The aim of this proposal is to migrate the incentives of PAR pools to Curve.

Rationale:

The goal of this proposal is to migrate PAR liquidity incentives on Ethereum to a better efficient DEX, Curve. This will exclude the PAR/MIMO Balancer pool who will stay on Balancer.

Currently all incentives are on Balancer, but it’s not a very efficient way to have good swap rates between stablecoins. After observing many V2 pools already launched on Curve, we established that for the same liquidity deposited in the pool we obtained an average slippage 50% less important than Balancer for stablecoins. The concentrated liquidity will allow the PAR to sustain a better price with more significant swaps. In addition, increasing the incentive will attract even more liquidity.

Following discussions on the forum, some contributors thinking that Uniswap is more efficient than Curve and would like the PAR/USDC pool on Uniswap and not Curve. So we decided to let the DAO choose via the governance vote.

Incentives Overview:

There is also a PAR/MIMO Balancer Pool live on Balancer. We propose to keep this pool on Balancer and reduce the yield from 28% to 26% of the Ethereum emissions.

Currently the PAR/MIMO Balancer Pool is 75/25 weight, we propose to change the weight to 20/80. The weight change will provide a better impermanent loss management.

Means:

The code is already ready to be deployed by the developers. There is no cost change for the treasury.

Technical Implementation:

Staking contracts for Curve Pools.

Voting Options:

  • Yes
  • No
  • Abstain
  • Yes
  • No
  • Abstain

0 voters

5 Likes

Who says Curve says… war ? :eyes:
The idea of going to 80/20 on balancer also seems to me more coherent.

2 Likes

I recycle my response on the Polygon pool :
guess everything is said in this proposal :

  • Better DEX, with better LP incentive, (and posibility to improve liquidity with Curve War
  • Better rate for PAR/MIMO pool,

=> I’m in, and I’m in favor of this proposal. :+1:

There is a plan for MIMO Capital to buy CRV and/or CVX to inter in Curve War ?
They want to provide Bribes via Votium ? bribe.crv ? Maybe other system (:wave: Paladin, we :eyes: you…) ?

2 Likes

Hey @Non0, Thanks for your feedback !

We are considering buying $CRV ($sdCRV) or $CVX. However, this will come in a second time after the new tokenomics and the multisig with community members will be set up.

Excellent proposal, thank you for the hard work.

However, after careful tryouts it seems that the pricing we can get on Curve V2 factory pools is not as good as what we expected. We must therefore consider incentivizing Uni v3 instead of Curve on mainnet as well.

From Martijn, who tried larger pools in addition to trying our smaller pool:

Using the exact same settings as the $50m EURT/3Crv pool the slippage is literally 12 times higher on Curve vs Uni V3. (0.8% vs 0.07% for the same trade size in comparison to the pool size).

The goal of this proposal being to provide better prices for PAR, Uni should be prioritized here, unless we find a better way to get a decent price on Curve. I would have voted yes prior to these trials, but I have to vote for a rework.

2 Likes

Hi @JeanBrasse ,
Do you mean that the ratio changes but also the proportion PAR/MIMO :

  • Before it’s 75 PAR and 25 MIMO
  • After that it’s 20 PAR and 80 MIMO
    Right ?
1 Like

yes correct, just got the info from thomas in the discord

1 Like

Thanks @george ,
Very good that, like on Fantom Opera :slight_smile: , a majority of Mimo for performance and a minority of PAR for insurance, a good balance that limits the need to sell a lot of MIMO when you want to remain crypto self-financing

Hey @Biscuit , Thanks for the feedback !

After many tests on my side, Uniswap is indeed more efficient than Curve.

This is quite normal because Curve automatically manages the liquidity to keep a good rate of $PAR and $USDC in the pool. On the opposite Uniswap lets the users manage the liquidity, which allows to maximize the liquidity around the price, but this is at the expense of managing the number of tokens in the pool.

In the short term it is therefore preferable to choose Uniswap to have a better price on the $PAR. However in the medium and long term it is preferable to use Curve, and this for several reasons that I had not exposed in the proposal:

  • possibility to have a gauge on Curve
  • possibility to buy $CRV and then lock them in $sdCRV to vote for our own pools and then have rewards in $CRV (so possibility to reduce the rewards in $MIMO on the pool which would lead to a decrease of the selling pressure on the token)
  • possibility to bribe our pools using Votium or StakeDAO

To conclude I think that the DAO should choose between Curve and Uniswap for the PAR/USDC pool on Ethereum.

Hi @JeanBrasse ,

Absolutly okay with you. But all these advantage are for :

  • MIMO Captial
  • The Liquidity Providers
    But not the Swappers : They still will suffer from a bigger slippage than on Uniswap.

Maybe bigger liquidity in pool will reduce IL on Curve.
If it’s possible, how much we need to have similar efficiency than Uniswap V3 ?

1 Like

Hey @Non0 ,
thanks for your feedback !

Unfortunately we can’t calculate how much we need ot have similar efficeincy due to the Uniswap liquidity concentration who change everytime.

1 Like

The vote will start April 12th at 10A.M CET and finish April 15th at 10A.M CET:
https://snapshot.org/#/mimo.eth/proposal/0x3bf697bed4316dbfb1e720dc7b8a3852bbe671d286243b5be6c816c4d3fe1865