[GRFC] - Whitelist crvUSD/USDC Convex Strategy for use in Gro protocol

Yield Strategies
1

Summary

According to the current Gro Protocol yield strategies framework and the comparison with the strategies within the current whitelist(Gro Yield Strategies), We apply to whitelist the Convex crvUSD/USDC pool according to the relevant rules.

Background

  • There has been significant TVL moving into crvUSD LP pools on Convex and Curve. We present an analysis of potential opportunities and risks for Gro DAO in whitelisting crvUSD/USDC pools on Convex as new strategies.
  • Please read our detailed investment analysis on the crvUSD pool strategies for more details
  • The crvUSD/USDC pool ranks 5th compared with current strategies in Gro Whitelist, as shown in the following chart.

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crvUSD introduction

crvUSD is an algorithmic asset-backed stablecoin. Its key innovation is in drastically reducing losses during liquidation through the use of Lending-Liquidating AMM Algorithm (LLAMMA).

crvUSD’s circulating supply was $95.6M

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More information here: Understanding crvusd - Curve Resources

crvUSD/USDC pool description

crvUSD/USDC is a relatively recent pool, launched in May 2023. During this time, APYs have ranged around the 5-9% mark. TVL currently sits at $55M and has fluctuated between 32M and 95M during the most recent timeframe.

Pros

  • Growing adoption of crvUSD in ecosystem evidenced by rapid rise in crvUSD supply
  • Pool size is sufficient to deploy a significant 7 figure strategy allocation
  • Liquidity and price stability have been tested previously, with price returning to peg quickly due to overcollateralization of crvUSD; max drawdown if we needed to remove liquidity would have been 0.5% + slippage of roughly 0.055% for a $2M withdrawal

Cons

  • Yield source is mostly CRV rewards rather than fees generated from trades, which could be reduced in the future
  • Relative short time in market for crvUSD and crvUSD/USDC pools

Submission date and next steps

  • Date of Submission: Aug. 21th, 2023
  • Move proposal to Snapshot if RFC feedback is implemented and there is sufficient support: Aug. 26th 2023 (at the earliest)

Signaling Vote

Please indicate below whether you are FOR, AGAINST; or have no opinion (ABSTAIN); on this sub-proposal.

  • For: approve adding crvUSD/USDC Convex to the strategy whitelist
  • Abstain: no opinion on approving crvUSD/USDC Convex as a whitelisted strategy
  • Against: do not approve the whitelisting of crvUSD/USDC Convex as a strategy
0 voters
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