Keynote by Martin Krung, Curve Finance

So hi everyone. I'm working as PD for curve but I have an originally back tech background. I present you two in this presentation one is presentation cures cur known as stable coin emm but we do much more things than we are just much more than stable coin basically and the second part is about our new swap we call it f swap is a new way to manage like liquidity inside basically so what is curve and yeah what we curve basically so curve we call it the home of stable coin so bread and business basically are stable coin because curve invented many things on the way and it started with stable swap in 2020 so that this time uniswap was like the only way to swap tokens but issues so marov the founder of curve he invented stable swap he also invented little bit later the v curve model who is widely used now then in 2001 was like a crypto swap who is a swap for stable pair and this is the swap we have have been iteration on it basically then we have we have our own stable coin curve with way of liquidation we call soft liquidation so you don't liquidate spot and we have own stable coin cur basically then have CDP Land is eh landing market with the same technology as the curd saving curd which is you can deposit curd you get savings rate and then the new situation is basically eh talk late So that's the history quick. Erm this is about the stable swap. It's like it has many big deep pools are widely used it makes a lot of volume.

Then we are basically one of the only decentralized protocol one of the few decentralized protocols I would say because our system is only upgradable or vote by the D. This means that there no all if upgrade our system needs to be a we can upgrade things and then we have different offers I said stable swap and cryptwap ehm it's it's like for secondary market like every USD based US dollar stable coin has basically a pool with very good mechanism not to be liquidated on spot basically you see here on the graph so basically liquidation zone you can get into the liquidation zone and if the price recovers you get out of the liquidation zone and not liquidated position is coming back alive Currently we have 240 around the curf te minted eight collaterals used mostly blue chip like bitcoin wpped e and some steaked e like this eh yeah many are building on us so is like an infrastructure we on the infrastructure layer basically so we we we we think we infrastructure many other projects build on us the latest one is also yb which is a new project of ours founder and reason why mentioning it is because the stable mob I present now is basically it's also used on YB for the liquidity on YB so yeah my talk is about innovation leadership so basically CF is a deep company pro basically innovate now the l situation is so what is basically if you think on the meaning of AMM so what's an AMM an AMM the name itself is basically it's an automate market maker so the market should be made by the AM like yeah it's the name even and inf we have the liquidity position inf are always fable this means you can trade it and the liquidity position is a token you can trade it's composible because there a price to the token you can use it in other protocols eh smart contract collateral and then the liquid concentrated current price because price at the price where trading is happening you get less slippage and better capital efficiency basically and we still are it's different and I'm going to compare to like dick paste amm later on so you see in in in in stab swap but also like in crypto the liquidity always has this kind of form and every position has the same liquidity and you see you can basically there's like some tradeofs you can have higher density and you use higher density if the deviation of the asset is low because then most of the time you like in the sweet spot to the trades are in sweet spot so the em revenues and fees basically so if you compare this to a tickbased conate liquidity ehm you this kind of distribution of liquidity and this is the euro/ USC euroc/usd pool and because we call it fix it's very good for low volatile assets basically but you can use other real asset as soon as the volatility are low it's very good to use that will show afterwards so if you have a tick based there are two yeah there are two friction point with this one and one is you need the liquidity to reset and it's very visible here because that now the price basically in the middle but you see the liquidity is not like this one liquidity is basically eh yeah not evenly distributed and the reason why is if you liquidity providing a tickbased emm you have to ehm mesraquidity resquid r basically like this work to do and then the liquidity needs to be rebalanced this means because you're taking out your bits they are light out of all so you fully in usc in this example. So basically you're going to reach it on other place and then at this time you lock in div loss and imp loss is like imp is somehow small in if you have a small deviation but the issue is this as soon as you're going to reset your liquidity and afterwards the price going back to the same price as before and you reset it again you lock in eh the rebalance loss. So basically you it's a real loss. It's not imputation loss anymore.

You really lose on the balance sheet basically it's less. So there are two issues with this. So the first one we found a way to like solve the first one but the second one yeah you can't undo this because that's just how it works. So the solution is basically eh yeah we have fix is ​​like focusing on low assets and one of the reasons is eh like we are still I say Ephic SP is one of the biggest market in the world like three trillions per day. One reason is not there yet because we still waiting for nonllar stable coins to be more more like widely used but this is coming and is low volatility two so it's very suitable for this but you can also use this for stock id test with usdcwe pool and you will see afterwards the numbers so in a way what we achieved with this we achieved the m the issue man for risk and use experience is not that good basically so what we find way and we call it refueling is that rebalancing is done in the amm itself this is already before the crypto the rebalance has been basically automatic but the new thing is that you basically can subsidize rebalancing what we call refueling so every time there is a re is a rebalance happening and this briefly explains how rebalancing work so basically you have now the price like this then the price changes a little bit then you're basically out of the density of the best place to be and then the am rebalance itself this was iteration animation new iteration pool see basically on the trades so we have like sport price the current price red line and then the density is always moving on the it's like wandering with with the price basically this is the rebalance happening inside this also is happening cryptosmope basically the new we found a new way basically you can subsidize the rebalancing a little bit called refueling so here you see this is a test made like it's a USD/pol there was a lot of volatility last few weeks we all know this is two days from last week and what you see is in the top basically when the pool get rebalanced and then refueling events are happening and then you see every time are like this bikes have even I charted it with some dollar prices so basically at this part the rebalancing is subsidized by yeah by the m and then you see below we see the price is here the price most of the time is around minus two and 2% on the SP the is very good place basically and to see I have another chart which is top so you see the price this is the price from like almost 500 price up in two days and the blue price is basically spot price and the price scale is is the is the the place is like the it's like where the dancity sits and of course the spot price is always a little bit ahead of time And then the AMS is adjusting itself to the price scale and again below you see the refueling basically.

So I think in a way this is very technical in a way it's a techn of this is maybe less in the technical technical way also like in the business way in now we have a situation where you can basically pay for the rebalancing from outside but of course somebody has to subsidize the pool so that is mostly that either issuers protocols if flows to revenue revenue flow forward income to rebalance the pool and then rebalance like this and I think the UX is way better with this because if you go now as the market moves more to like serving bigger clients basically the idea that somebody to liquidity in bas liquidity somebody basically has to major liquidity access to liquidity this is for us as strange because liquidity should be noncustodial so and so it's so we found a separation of these two r so liquidity provided in a way can be even passive again so you just provide your liquidity and you don't have to care about who is who is rebalancing it basic get rebalance for you and other benefit approach the liquidity is like the wrong spot but this solution basicallyqu on the right spot and it's all of the liquidity and still it's composible and it's just that if you look at picked swaps is quite some time but composibility has not really reached so if you have a position on a tickbased em it's really hard to use it as somehow. So yeah, that's the end. So I think the design space we see here, the design space of AM is not really done. Of course it's like a special version in a way because good for low volatile things and so it cuts out like space in the design space and it finds its place in this way but the improvement is not done because we can still experiment with like more dynamic fee because now the fee is always the same but what you should do is basically ifity is higher you should take more fees because you can earn more and What we are working on is now the pools are always like it's own by the down the parameter two so the delegation of parameters we work on so basically can delegate to an entity optimize your pools which is like we as an infrastructure we don't we do optimize some pools big ones we help but the small ones somebody to do and then we also think about how we can experiment with not adjusting the density place but also to make lower condition. Okay.

Yes.