Dashboard & Use-case

At its core, CurveUSD is a stablecoin lending protocol with a unique Automated Market Maker, known as LLAMMA - which provides users with the promise of a lower risk of liquidation.

The $crvUSD stablecoin is fully backed by collateral, so the protocol itself is decentralized, and keeps a strong $1 peg with the LLAMMA mechanism and $crvUSD burn upon collateral withdrawal.

The promise of liquidation security and a strong $1 peg is CurveUSD's main use-case for users. However, before we dive into the protocol's dashboard to see how users can open a position, we need to fully understand LLAMMA (in order to understand its use-case).

How does LLAMMA work:

LLAMMA is a new type of AMM introduced by the Curve team that incentivizes arbitrage bots to liquidate the collateral in the active band (price range) by increasing (or decreasing) the "P_AMM" price (the price of collateral in the pool) faster than the "P_ORACLE" (market price).

Let's examine both scenarios:

  • Case 1: The oracle price decreases (P_AMM < P_ORACLE). If the oracle price of the collateral starts to fall, the algorithm will make the AMM price decrease faster, creating an arbitrage opportunity to deposit $crvUSD into the pool and withdraw the collateral asset (e.g. ETH). This results in collateral being liquidated to $crvUSD.

  • Case 2: The oracle price increases (P_AMM > P_ORACLE). If the oracle price of the collateral starts to rise, the algorithm will make the AMM price increase faster, creating an arbitrage opportunity to deposit ETH into the pool and withdraw $crvUSD. This results in collateral being shifted back to ETH.

Keep in mind that there is no debt repayment during the process of soft liquidation. The collateral asset is just rebalanced by shifting it from a volatile asset (e.g. ETH) to the stable asset $crvUSD, and vice versa. The more non-volatile collateral, the healthier the position.

We mentioned bands as one of the key pillars of how LLAMMA works, so let's cover them in detail as well:

How do bands work:

In the CurveUSD protocol, each band represents a price range (calculated by the protocol) at which the amount of collateral in that band can be liquidated if the oracle price reaches it.

The number of bands can go from 4 to 50, and the width of each one is determined by the Amplification parameter - A.

Formula: 1/A * coll_price

For example:

  • A = 100, 1 ETH = $2000 -> Band width = $20.

However, band width isn't fixed as each band uses its collateral price in the calculation.

Choosing a bigger number of bands gives you a wider price range for liquidation, but increases the chances of higher loss during soft liquidations (and gas costs).

With a strong foundational understanding of how CurveUSD works, let's dive into opening a position with CurveUSD:

Show me how:

The first step would be to navigate to the CurveUSD dashboard from the sidebar on the left:

You'll land on the "Manage" tab by default, but you'll also have the:

  • Automate tab, which gives you access to automation options.

  • Notify tab, which lets you set custom-tailored notifications for your position.

To the right of the tabs, you'll see the wallet and token selection dropdowns:

  • The wallet dropdown lets you select the account you'd like to open a position from.

  • The token dropdown lets you choose which collateral you'd like to supply for $crvUSD.

The final bit of info before create a posiiton is the Borrow rate, which is located underneath the Manage, Automate, and Notify tabs.

The Borrow rate is variable, so it's very possible that the one in this screenshot is currently outdated.

You're now ready to create a position on CurveUSD:

  1. Click on "Create" from the main dashboard:

  1. Our first example will be opening a Borrow position. You'll need to input the amount of collateral and the debt amount, as well as the number of bands.

  2. By hovering over the green "LR" button, you'll be able to find your liquidation range.

  3. Toggling on "Show soft liquidation advanced details" will give you a specific breakdown of the prices at which the bands will convert collateral into $crvUSD:

  1. If everything check out for you, click on the "Create" button.

The dashboard will now show your new position:

The metrics you'll be able to find here are:

  • The band distribution of your position, and the amount of collateral that will be swapped if its value decreases.

  • The HR (Health Ratio) and CR (Collateralization Ratio) of your position

  • Your Bands overview (both your personal bands, and global)

The final part of the dashboard we'll cover are the manual management tools:

Under the "Leverage" tab, you'll find:

  • Boost - This tool is used to increase your exposure to the collateral asset when the safety ratio of your position increases. It does this by borrowing more crvUSD, swapping it to ETH, and supplying it to your current position.

  • Repay - This tool is used to increase the safety ratio of your position by swapping part of your collateral asset in order to repay part of the debt.

Under the "Add/Remove" tab, you'll find basic actions such as:

  • Supply - This tool is used to add more collateral to your position in order to increase the safety ratio.

  • Withdraw - This tool is used to withdraw collateral from your position, in turn decreasing your safety ratio

  • Borrow crvUSD - This tools is used to borrow more of the debt asset from your current position, in turn decreasing your safety ratio.

  • Pay back crvUSD - This tool is used to pay back part of (or the entirety) of your debt, in turn increasing your safety ratio.

Underneath, you'll find "Combine with another action" - where you can click on any of the available options to add another action to your transaction:

Before executing any of these actions, the dashboard will provide you with updated metrics for your position based on the values you've input:

You're now well equipped to efficiently manage your CurveUSD position on DeFi Saver!

One of the main benefits of utilizing DeFi Saver's service is access to our automation options that maintain your position based on your personal inputs. CurveUSD currently supports Automated Leverage Management and Automated Payback automations.

Automations have minimal debt requirements and their availability depends on the chain you're currently on.

Closing or Migrating your position:

The two remaining options on the dashboard that we haven't covered are Close and Migrate.

If you decide to close down your current position, the steps are extremely straightforward:

  1. Navigate to the main dashboard:

  1. Select the "Close" button:

  1. Choose how you'd like to close your position.

  2. Since closing from your position involves swaps, you can also (optionally) set the exchange route and slippage limit.

  3. Press "Close"

The "Close (to X)" represents which asset will be withdrawn to your EOA wallet once the position is fully closed. To understand this in more detail, let's look at how the "Close" tool works in the background:

  • First, it flash loans the debt asset

  • It uses the flash loaned funds to pay back all of the debt

  • Now that your collateral is freed up, it's withdrawn

  • The collateral is then swapped to the debt asset

  • This is used to pay back the flash loan

  • The remaining funds are withdrawn to your EOA

Now, if you choose "Close to (collateral asset)", this means that it will only swap enough of your collateral to cover the flash loan, but it will withdraw the rest in the collateral token. If you choose "Close to (debt asset)", it's going to swap all of your collateral to the debt asset, pay back the flash loan, and the rest will be withdrawn in the debt token.

To Migrate a position, visit the main dashboard, and you'll find the button right next to the "Close" button.

From there, you can choose the wallet you'd like to migrate the position to:

Once everything's good to go, click "Migrate".

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