Abstract
This is a suggestion to add Curve v2 pools into the Allowed List / AllowedContracts for Credit Account users, applicable to WETH pool.
Motivation
The current problem (or rather, a situation dictated by the early stage of Gearbox Protocol) stems from the current leverage opportunities being very limited. Curve and Convex safe pools have long been not paying much, which is reasonable: lower risk = lower pay. What that leads to is: low rates available for leverage strategies → low max interest rate borrowers are prepared to pay → low participation on the passive lending side. It’s obvious, I know. How to fix it?
Leverage opportunities must grow, so must composability. As we always envisioned! The better the rates and profits leverage borrowers can make - the higher the borrow rates they can pay. Below are table with current APYs for some targeted farms:
| Pool | Current APY |
|---|---|
| 3crypto Curve+Convex | 5.9% |
| CRV/ETH Curve+Convex | 14.2% |
| CVX/ETH Curve+Convex | 12.3% |
| LDO/ETH Curve+Convex | 13.4% |
Specification
New farms will be added into a separate Credit Manager (“Experimental”) in order to add limits to it. It breaks composability a bit (users can’t switch between old farms and new strategies within the same Credit Account), but allows us to test these hypotheses before the V3 launch.
-
Overall Borrow Limit for Credit Manager: 2800WETH (~5M$).
-
Allowed Tokens & Liquidation Thresholds:
| Token | LT |
|---|---|
| Curve/Convex 3crypto | 88% |
| WBTC | 85% |
| USDT | 85% |
| CRV | 25% |
| CVX | 25% |
| Curve/Convex CVX/ETH | 82% |
| Curve/Convex CRV/ETH | 82% |
| Curve/Convex LDO/ETH | 82% |
| LDO | 25% |
- Cap Limits per Credit Account
Keep the same limits as for Current WETH Credit Manager.
Price feed
For Curve v2 pools is own price oracle is used (see code). It was audited by Chainsecurity. As price feed for other tokens Chainlink is used.
Note: existing LDO price feed should be replaced to CompositePriceFeed.
Interest rate curve
if proposal succeeded, we can predict that utilization moves from current farm pools (which are mostly in staking derivatives) to new added ones and farmers will be ready to pay higher APYs, while current farms will become un-profitable. Accordingly, it will be necessary to change the Interest rate curve’s parameters, but the question is how to do it in best way. So proposal here to keep current rates and adjust them in a week after new farms going live.