Swerve Liquidity Plunges, Curve Breaks Record – Trustnodes

Swerve Liquidity Plunges, Curve Breaks Record


Curve deposits, Sep 2020

Swerve is in some trouble with 80% of its liquidity vanishing practically overnight following a change to the weight between the different assets in the pool, called the A parameter.

“There was a DAI pegging issue which was selling DAI cheap and was being arb’d. So we had to fix it to restore DAI balance in the pool. Now, it’s in balance,” a Swerve mod says.

Swerve lowered the A factor to 100, “which caused minor losses on swUSD (~0.08%),” so the liquidity providers have now left in part perhaps because they not getting cheap dai anymore and the swerve token rewards are not quite the same anymore as the two weeks incentive period has ended.

Swerve had some half a billion in liquidity two weeks ago, now it’s less than $100 million in assets with around $25 million in daily trading volumes.

What’s more a proposal to fund development is struggling to meet quorum with just 8.3% voting, about half of the required 15%.

This proposal adds a 0.01% admin fee to fund the treasury, lacking which then they might not have money for basic things like hosting costs.

“We’re having some trouble passing quorum for the vote to pass treasury — presumably a lot of the veSWRV holders left after 2 week incentive period and are no longer incentivized to participate,” a Swerver says.

Meanwhile at Curve it’s party time with deposits there ballooning to $1.6 billion, it’s highest ever.

Daily volumes at Curve have reached $350 million. That’s more than is traded on Kraken or many other long established centralized crypto exchanges.

CRV’s price has also risen for once to $1.4 from about $1.2 a couple of days ago with this currently having a market cap of just $80 million with a circulating supply of 55 million out of an initial supply of 1.3 billion.

At total supply it is probably valued appropriately at $4.7 billion, but with volumes of $350 million a day, its revenue could well reach half a billion a year which could be spent to buyback the tokens.

Meaning at current supply and its rate of growth, this is probably undervalued depending of course on what CRV holders plan to do in regards to revenue and profits and how it should be spent.

While for Swerve, if this quorum doesn’t pass then there may well be uncertainty about its future operations with this being a copy fork of Curve’s Y Pool only.

It’s the second fork that’s now finding some trouble after Sushi got way surpassed by Uniswap’s astonishing airdrop.

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