SIP 107: Add CRV crypto synth Source

Authorkree
Discussions-Tohttps://research.synthetix.io/t/sip-adding-crv-long-synth-scrv/277
StatusImplemented
Created2021-01-24

Simple Summary

Add a new long Synth for Curve.fi ‘s CRV token.

Abstract

If approved, this SIP will add a new synthetic long token sCRV that tracks the price of the ERC-20 CRV found here 0xd533a949740bb3306d119cc777fa900ba034cd52 .

Motivation

Adding the CRV token will enable the trading of CRV inside the synthetix ecosystem benefiting traders including dHedge who wish to include this token in their portfolio. It will also enable the creation of a Curve same-price pool of the native CRV token with sCRV. The lead developer of Curve Michwill has stated he has previously has had large buyers express a desire for an on-chain method of acquiring CRV and this would likely drive volume via the Curve x Synthetix to Synthetix as a slippage free trade mechanism.

Further trading volume is likely to be generated as CRV has liquidity mining for the next 4 years and so there will be a steady flow of people looking to buy or sell large quantities of CRV which can be captured via this token and the mentioned curve pool.

Specification

Overview

This Synth will be implemented in much the same way as the other long crypto Synths. I have not recommended an inverse synth yet to reduce possible disagreements as they are currently a source of management headaches reseting price limits.

Rationale

Delphi Digital has not done an assessment of CRV’s available liquidity however Uniswap has an ETH/CRV pool with total liquidity $5.5million (half is CRV), Sushiswap also has an ETH/CRV pool with total liquidity of $10.9million (half is CRV again)

It is also listed on centralized exchanges Binance, Huobi, OKEx and Kraken. Seeing daily volume of 100, 62, 68, 2.8 mill on each respectively with -2% depth of 466,000 , 243,000, 429,000 and 55,000 and +2% depth of 265,000, 330,000, 356,000 and 158,000 respectively. These limits exceed delphi digitals 2% boundaries by 4x if compared to REN on Binance whilst nearly matching FIL’s -2/+2% boundaries. Both REN and FIL were deemed to have strong liquidity and approved for listing on Synthetix by Delphi Digital.

I have added a table of the above data and more in the forum post.

Technical Specification

Chainlink already has a decentralized price feed for CRV that is funded by Aave and Curve, this will reduce implementation/maintenance costs.

Test Cases

N/A

Configurable Values (Via SCCP)

If approved, these Synths could be added in the upcoming release.

Copyright and related rights waived via CC0.