Since the launch a few months ago, the Aave AMM market has proven to be an interesting value proposition for the Aave protocol. At some point, the Market was around 500M in market size and it generated 80K USD worth of assets for the ecosystem reserve.
Since launch though, uniswap has in the meantime migrated to V3 (which doesn’t have fungible positions) and balancer to V2, which means all the LP shares currently listed in the AMM market are now obsolete. This is affecting the AMM market TVL, that now dropped to around 60M.
I propose that the AMM market is renewed as following:
Delist the following LP Shares:
List the following balancer V2 LP shares:
Here is a basic risk assessment for these LP shares
Would it be possible to support BalancerV2 stable pairs or Curve LP tokens? Could be interesting to lever using stablecoin optimized liquidity, given the implicit comfort users in this market already have with LP positions
@Joey-fei@Dydymoon all of these are certainly a perfect fit for the AMM market. There is some additional work to be done given the complexity of the curve gauges and the boosting mechanism that is delaying the implementation, but it’s most likely coming before the end of Q3. Implementation can be found here
This is quite promising IMO, would love to see this go live to renew interest in the AMM market after the switch from uniswap v2 to v2 tempered it’s growth a little bit.
I’d also like to point that these BAL v2 LPs would qualify for BAL rewards, so there is no opportunity cost to being deposited in Aave, and the ability to borrow against them is just additional utility. I think this is where the market will thrive the best ( no opportunity cost like missing on rewards to deposit an asset, only additionnal utility ).