SIP-10 New iPool containing USDT, USDC, DAI - requested by DFI.money/YFII

Summary

Dfi.money/YFII has approached the Swerve community about the formation of a new iPool containing USDT, USDC and Dai. These are the most used 3 stablecoins in Defi, and make up the majority of demand for stablecoins. The reason they have requested this is that YFII do not currently accept TUSD as a deposit currency therefore cannot currently use the default swerve pool since it would expose them to TUSD risk.

Those familiar with the ypool on curve by Yearn finance will have a good understanding of how this would be structured.

Motivation;

This would be a good way to bring more AUM under swerve, currently YFII has 50m AUM that can be brought under swerve with this integration.

  • For: Creation of iPool with USDC, USDT, Dai as the pool components.
  • Against: Status Quo

0 voters

1 Like

YFII iTokens works similar with yTokens in yearn, choose the best lossless yield-farming project and gain more principals

How to generate iTokens?

Deposit USDC/USDT/DAI/yCRV/ETH and other assets in the YFII Vault to obtain iToken of the corresponding currency. Say,if you recharge USDC into YFII Vault, you can get iUSDC

What does iTokens stand for?

iToken can be understood as the equity Token of the YFII Vault, representing your equity share in the Vault. Taking USDC as an example, you can get slightly less than 1000 iUSDC by depositing 1000 USDC. If the current price is 1 iUSDC = 1.01 USDC, then you can mint 1000/1.01 = 990 iUSDC. If there are 99,000 iUSDCs in the entire USDC Vault, it means you own 1% of the total USDC in this vault

Why does the value of iTokens increase automatically?

Because YFII Vault uses a lossless strategy for the principal, the revenue of the target farming pool will automatically be converted to the vault’s Token and return to the vault, while the number of iTokens remains unchanged. In this way, the iToken in the vault can be exchanged for more Tokens, resulting in an increase in the price of iToken

2 Likes

I think such pool could be useful, but from another side it would be better to cut off all such third parties since they continuously dump tokens and prevent direct users interaction with the platform. They are kinda useless for a project since money can find direct way to deposit and earn rewards as liquidity providers.

Also such pool has very small % of total volume in curve. It means that real demand for swap that 3 stablecoins can be covered with the current pool.

2 Likes

Dumping tokens as a strategy can be employed with or without the creation of this pool, see defidollar, harvest finance’s current auto dumping strategy that uses the existing default pool. What it does do is stop compostability of integrating swerve into the wider defi ecosystem. So that not only can someone receive LP fees on swerve, but they can also earn yield on top. See the success of ypool’s stablecoin primitives bring to the greater ecosystem in acceptance and use of curve primitives.

2 Likes

I support this 100%.

1 Like

It’s important to build some momentum here and although they’ll be farming and dumping it will build valuable foundation for the project. With emission being so low the sell pressure won’t be insurmountable. And an additional $50M in liquidity for the biggest pairs (as liquidity is plummeting [as expected and not alarming in any way]), is enough to keep Swerve relevant and ensure the use case is still being fulfilled efficiently.

The odd thing is this pool doesn’t bring any new coins to the table. These swaps can be fulfilled by the current pool.

Pros:

-Exposure from YFII community through partnership
-More liquidity for biggest pairs
-Low emission = low sell pressure
-Guarantees use case can be fulfilled

Cons:

-Sell pressure from dumping
-New pool doesn’t bring on any new assets

The pros far outweigh the cons and can almost guarantee survival in a very competitive landscape. Big emission period is over. Now people are on the sidelines eyeing Swerve to see if it will be able to build liquidity and volume. This is a great way to build momentum and show the crypto community that Swerve is serious about bringing in liquidity and offering a valuable service.

I support this 100%.