Freeliquid adds Curve Finance 3pool tokens as collateral
Users of Freeliquid can now borrow $USDFL by depositing Curve’s 3pool LP tokens ($3CRV) as collateral
Starting from 16.3.2021, Freeliquid supports Curve Finance’s 3pool LP tokens ($3CRV) as collateral for borrowing $USDFL. The respective Vault parameters are the same as for other stablecoin pools: min. collateralization ratio 110%, Stability Fee 0%, no liquidation possible. While tokens are locked in Freeliquid Borrow, users will receive income both from 3pool’s base APY and $CRV farming. To our knowledge, these are unique terms in decentralized lending space with Freeliquid being an absolute first mover to offer them.
The vote for adding Curve Finance 3pool ($3CRV) tokens has been successful! Starting from March 16, 2021, users of Freeliquid can borrow up to 90% in $USDFL from their original deposit in 3pool. Below, we have answered common question about Curve’s integration and made a short tutorial how to deposit $3CRV on Freeliquid Borrow.
What is Curve Finance?
Curve.fi is a decentralized exchange that is focused on the stablecoin pools. As of March 2021, it has the largest stablecoins liquidity in the whole DeFi space. Curve Finance enables exchange with extremely low slippage between USD stablecoins as well as different iterations of $BTC or $ETH (for example, $renBTC and $sETH).
For more information about Curve Finance, please refer to their official documentation:
What is 3pool?
3pool is the largest liquidity pool of Curve.fi, holding around $800 Mil of value in $DAI, $USDT, and $USDT (based on pool statistics). Together with CRV farming rewards, liquidity providers of 3pool enjoy a ~16% to 40% APY.
After depositing in 3pool, liquidity providers receive passive income in form of base APY as well as $3CRV tokens that they can stake and earn $CRV governance tokens as rewards.
How does Freeliquid’s support of 3CRV work?
Starting from March 15, 2021, Freeliquid Borrow supports 3CRV tokens as collateral, also enabling our users to receive CRV farming rewards while their tokens are locked in the Protocol.
Once users deposit $3CRV in Freeliquid Borrow, the tokens will be automatically staked and receive $CRV rewards. After users cover the $USDFL debt and unlock all (or a part) of deposited $3CRV tokens, they will also receive the $CRV tokens accrued from staking.
Will Freeliquid support any other Curve pools?
So far it is not planned — providing support for each pool requires a lot of testing. However, 3pool is the largest pool on Curve.fi with one of the highest APY. With ~$800 Mil locked in value, we believe that 3pool alone will attract a lot of funds to Freeliquid Borrow.
I am already providing liquidity to 3pool and have $veCRV locked. Can I keep my reward boost?
No, this is not possible. Recall that Vaults in Freeliquid Borrow are created via a proxy address for your wallet. Thus, staking in gauge and receiving $CRV farming rewards also occurs based on the proxy address the Protocol creates. Since $veCRV are already locked and assigned to your original wallet (but not the proxy), the boost will not be considered.
For anyone else interested, you can read about boosting your $CRV rewards here. As just mentioned, this does not apply to deposits at Freeliquid Borrow.
How add to 3pool’s liquidity for Freeliquid Borrow
- Make sure you are using an Ethereum wallet that is supported by Curve Finance, for example, Metamask or Ledger.
- Note that Ethereum transactions used in DeFi platforms like Curve and Freeliquid are data-heavy. With the current gas prices, the total fees for using Curve and then issuing a loan on Freeliquid can reach several hundreds of dollars. Please keep that in mind and plan your deposit accordingly!
- Prepare the funds you would like to deposit on Curve (and later to Freeliquid) in following stablecoins: $DAI, $USDC or $USDT. You can also use a mixture of two stablecoins or all three of them. Note that the proportion of stablecoins you chose will probably affect the bonus or slippage when depositing (for details, read the section “Understanding deposit bonuses” here).
- Go to curve.fi/3pool/deposit, connect your wallet, and enter the amount of stablecoins you would like to deposit. It is essential to press the “Deposit” button and NOT the “Deposit & stake in gauge” when locking funds. Otherwise, your 3CRV tokens will be automatically staked on Curve and become inaccessible for Freeliquid Borrow.
You can also check the official Curve’s guide on depositing in 3pool but again, do NOT stake your LP tokens in gauge, as mentioned above!
5. After the transaction is done, you should receive $3CRV LP tokens on your wallet. As usual, you can now go to Freeliquid Borrow, connect your wallet and simply pick up the new Vault with 3pool being a collateral (see below). Refer to our tutorial on Freeliquid Borrow, if you have not used it before.
6. When you decide to cover your $USDFL debt (partially or fully), you will receive the respective amount of your $3CRV tokens and $CRV rewards accrued for the past period. With the $3CRV tokens on your wallet, you will be able to simply withdraw your stablecoins from Curve’s 3pool.
As far as we know, the support of 3CRV collateral (including the CRV rewards!) is unprecedented among current lending platforms. Freeliquid Protocol has once again become a first mover in the industry — much more to come!