0xTutti, Curve Finance | Llamalend V2

Hi. Um Yeah, oh, no. Make this one. Yeah. So, I'm here.

I'm Toothy. Uh I'm the product architect at Curve. Um where I help Brains basically put their ideas together into something that is a usable and um accessible to users. Curve has not been very much known for that, but ultimately, despite complexity, it has built a true infrastructure for on-chain liquidity. So, for those of you who are not familiar, what is Curve?

Um Curve is basically a decentralized infrastructure for stablecoin. Um it launched with the first uh stable swap AMM, and today, it's basically hosting most of uh the stablecoin liquidity on-chain. It has processed up to 1 trillion uh dollar of swaps for stablecoins. And it's basically what we consider the backbone of DeFi. What uh it's been known for is basically innovating uh one step at a time.

So, the first innovation was the stable swap, which enables swapping with very low slippage between equivalent assets uh on-chain. Then, it also added the vote escrow uh governance model, where people lock token governance token in exchange for revenue share and um governance power. Then, we introduced the crypto swap. Then, we added uh crvUSD, our decentralized stablecoin. And uh Lama with the liquidation protection mechanism, which I'll go over later.

Lamaland V1, um our savings uh um stablecoin version, where people can deposit crvUSD and get yield on-chain. Um Michael was presenting yesterday FX swap, which is uh our new um algorithm for swapping and for enabling low slippage swaps for four x pairs. And what I'm going to talk about today is Curve on Curve V2. So today, yeah, Curve powers DeFi. We have tons of protocols building on top of us, be it either vaults or also asset issuers using us as their primary market or their secondary markets as well.

We keep on getting on seeing innovations and new uh new tools and new DeFi tools being built on top of Curve all the time. Um but we notice one thing, right? When users come to us and asset issuers come to us, they they want to basically get their assets distributed and used. So they launch the assets and then they're basically putting it on chain and they also create a pool and then they want to make it useful, but this is pretty hard and this is where lending comes in, right? Um So right now, basically the the problem that we have is that DeFi lending is not very currently not very efficient, right?

We have binary liquidations, so they mostly happen at a fixed price. Most of the time the collateral is sitting idle as well. And basically issuers, they struggle to keep like they struggle to create deep liquidity that is actually sticky. Um so yeah, as I was saying, liquidity is not the only thing you you need. You can deploy a pool, you can throw incentives at it, you get basically uh farmers that come in and then once they once the incentives run out, then yeah, you're stuck with a liquidity that is not used and you have less of that.

So basically assets need to be productive and to have productive utility. And this is where it breaks a bit uh this is where lending comes into place where it gives a second another utility to to assets. And this is where Llama comes into play. So, most traditional lending protocols, they have instant liquidations which happen at a fixed price and which also can create a liquidation cascade at the worst scenarios. But, we believe that there is a better model which is basically continuous risk management where positions don't get liquidated at fixed price but but gets basically gradually adjusted as the prices go down.

And this is what we have built out Curve with Llama. Llama is our liquidation protection mechanism and it's what's powering also CRVUSD. And what Llama gives us is basically better borrow survivability. Um also lowers the volatility in terms of big spikes, but also like for users it enables them to have more LTV when they want to borrow. Um I can go around explaining how it works, but the short version of it which is not the technical one is that instead of having a liquidation that happening at a fixed price, users get a liquidation zone and within this liquidation zone, liquidation happens gradually and ultimately that gives them more time to act when markets go against them.

So, Llama Lend V2, what does it bring? So, we have Llama which is this liquidation protection mechanism that is there and we learned a lot from deploying it and from seeing it powering our stable coin but also powering permissionless markets. And what comes with Llama Lend V2 is that we're basically we're we're moving this experiment that we had to something that is a real market infrastructure. Um so, it's really designed for more advanced strategies. It's designed to it's designed also to power productive real world assets.

And also to help asset issuers maintain their liquidity and have healthy markets. So, what's new with Llamalend? We will support more collateral, so we will support Curve LP tokens. So, that means that users will be able to loop through it. We will also support yield-bearing full tokens.

We will also support PT and YT tokens. And as well, we included the more security for our markets. So, we have created markets we have a better security framework. We have the Llamarx people here that are helping us ensure this. And also, we introduced the notion of admin fees.

One thing that I realized is missing here, so is until now Llamalend markets, they were all segregated to only supporting CRV USD on either side of the market, but with Llamalend V2, we support any type of collateral. So, that means that there's liquidation protection for everyone. So, what this enables, right? Uh what we believe it's it's what we want to see users do basically is uh get on with leverage looping and advanced yield strategies. It will enable them to have more efficient delta-neutral positions.

It will also uh link the DEX with our liquidity positions and Llamalend's better where users will be able to borrow against their LP position, earn yield from the trading fees, and earn from CRV rewards. And as well, basically loop in them and get even more yield while providing liquidity. So, this is even better for asset issuers. Um And then, we also support those new asset classes, right? So, any any asset as collateral, any asset as borrow asset.

And also, what we want to see future RWAs, and that can be euro stable coins, it can be uh Brazilian reals, it could be it can be whatever we want. And also uh hopefully better uh and lower friction UX for leveraging. So, one-click leverage to basically loop your positions and get even more yield. So, what is unlocks, right? Uh for users, it means that they get more capital efficiency.

They also, by using Lama and liquidation protection, they get lower liquidation risks. That doesn't mean no liquidation. Uh and they also have like one-click access to more advanced issue strategies. For asset issuers, they get deeper liquidity. Um they also get more usability.

They also get more demand. And basically, they can offer yield donations. Uh for protocols, this is a new primitive. We hope uh we want to see more people building more stuff uh on top of it. And we're really excited to see what people uh will do with it.

And for institution, basically, I think it's it brings liquidation to a more familiar domain where um liquidations don't happen in one go. Um they are gradual. They are akin to margin called. And they can then also uh structure the yield better. So, yeah.

As I was saying, um a pool got deployed and now what? Um What we uh believe that we are offering now with Curve is not just a DEX and a lending protocol. We're offering a full market infrastructure. So, it's not just lending, it's basically the whole package. Um so, Curve is basically powering the interest rate layer of DeFi.

Um where asset issuers and users can get uh deep access to stablecoin liquidity. They can get better collateral rebalancing. They also get access to battle-tested infrastructure. Um we're one of the OG protocols and we're still uh here. And they also get a lower cost of liquidity formation.

So, yeah. Um Ultimately, that gives them basically uh a cookbook where they can do everything in one place, which is Curve. So, they issue an asset, they create they see the a pool and create liquidity, then they can create a lending market giving utility to their asset as well. This unlocks leverage, then basically it grows demand, people start looping it, which deepens liquidity, reinforces the issuance, etc., etc.

So, they they basically can do everything that they need on Curve. So, yeah, Curve provides the full stack basically now for on-chain markets. We're really excited to see Llamaland V2 um hit the chain um and the current format that we have for it is a launch in Q2. Um, it will start with a test phase on Optimism, then we will move to mainnet to provide the support for a CRVUSD mint market, enable Curve LP collateral as market, and then ultimately PT tokens. We're doing this gradually to make sure that nothing breaks and that uh everything stays secure at all time.

So, yeah, um that's pretty much it for me. Ultimately, what we want to tell asset issuers is to come to Llamaland.