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End of the Curve Wars? Terra Proposes Deploying "4pool" on Curve to Establish a Stablecoin Yield "New Gold Standard"

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End of the Curve Wars? Terra Proposes Deploying "4pool" on Curve to Establish a Stablecoin Yield "New Gold Standard"

Terraform Labs members initiated a governance proposal "4pool," planning to deploy a liquidity pool consisting of UST, FRAX, USDC, USDT, and other stablecoins on various mainstream blockchains through Curve using the Terra and Frax protocols. They refer to it as a new "gold standard" for stablecoin yield, excluding the Anchor protocol, and bid farewell to the veteran stablecoin DAI on Twitter.

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4pool

Terraform Labs member ezaan stated in a proposal that due to the ongoing confrontation between UST and FRAX in the Curve war, the intense competition between the two sides has made it difficult to end the dispute. Instead, it is suggested to collaborate to expand the decentralized stablecoin market and create a significant amount of liquidity to increase the adoption of decentralized stablecoins in the DeFi space.

Terra, along with the algorithmic stablecoin protocol Frax Finance, are among the largest holders of "yield aggregator Convex Finance" and "CVX voting delegation platform Votium Protocol", accumulating over 3.65 million CVX.

ezaan believes that with the guidance of vlCVX tokens and votium incentives, 4pool will become the most widely adopted and liquid cross-chain stablecoin pool.

In addition, OlympusDAO OHM and its forked protocol, as well as CVX's third-largest holder Redacted Cartel BTRFLY, will also join 4pool.

Potential Impact

Currently, the largest stablecoin pool on Curve is 3pool DAI, USDC, USDT. After Terra attracts various stakeholders, 4pool may become the highest-yielding stablecoin pool, leading to yield farmers rushing to join 4pool and potentially abandoning 3pool.

ezaan believes that this may cause a sudden drop in DAI liquidity, while UST's influence in the Ethereum ecosystem will further increase.

USD Pool | curve.fi

4pool will initially be tested on Fantom, Arbitrum, and the Ethereum mainnet. ezaan emphasized that this will not impose a greater burden on the Anchor protocol.

The respective growth rates of the aforementioned protocols since April are as follows:

  • Terra LUNA: 15.83%
  • OlympusDAO OHM: 14.54%
  • Convex Finance CVX: 20.85%
  • Redacted Cartel BTRFLY: 40.05%