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July Wrap Up (including Tornado Cash events)

July Wrap Up (including Tornado Cash events)

Sam Lekhak

August 25, 2022

July Update (including Tornado Cash events)
Hi everyone! The last couple of weeks have been a whirlwind, so we thought it would be great to give the Liquity community a quick recap of the recent events:

Crypto community reacts to Tornado

As a result of Circle freezing all USDC in the Tornado Cash contract, users of some dApps in the space who had interacted or received funds from Tornado had issues interacting with frontends

Great to see some decentralization maxis highlighting the value of LUSD for DeFi:
- Tetranode highlighting resilience of $LUSD
- Erik pointing out the lack of freezing capabilities on $LUSD
- UnstoppaBull highlighting the full stack of decentralization that $LUSD offers

Getting recognized for decentralization is helpful, but Liquity is not the type to rest on its laurels; we have some highlights to share which will help with $LUSD liquidity moving forward

Liquidity Updates
Curve Pool

The increase in popularity of $LUSD can also be seen by the volume uptick of the $LUSD + 3CRV pool on Curve Finance.

Troves numbers increasing

In addition to the Curve pool, we have also seen a 20% increase in the number of Troves that have been opened since the start of July, signaling an increased appetite from investors to borrow $LUSD against their ETH.

You can see more stats regarding Liquity here:

Resiliency Premium

With the uncertainty & demand for decentralized stables, TokenBrice’s thread mentions how whales have resorted to swapping into $LUSD. The increased demand means that $LUSD is trading at a slight premium, which users are still willing to pay for increased security.

Future Liquidity Plans & Proposals

Frax Pool on Curve

With Frax launching the FRAX/USDC basepool, FRAXbp/LUSD is one of the top metapools currently, and generates up to 14% APR! With $7.8m TVL at the minute and the FXS gauge to come, we expect volume to go up:


Not satisfied with being just on Layer One, $LUSD's position is growing nicely on Optimism with Velodrome, where you can earn 11% APR thanks to some active airdrop management. With the additional VELO rewards being relocked, the LUSD/USDC pool has 4% of all gauge votes on Velodrome since launch.

You can check out their pools here:

Optimism Grant Proposal

Liquity also has a pending proposal with the Optimism DAO for an OP grant to further support $LUSD liquidity on Optimism. We believe in the power of harnessing our community, and if you care about decentralizing stablecoins on Layer 2’s, please participate in the discussion here: Optimism Grant Proposal

Enter Powerpool

Folks at PowerpoolCVP have been busy cooking up a neat addition to the $LUSD toolkit, going by the name of $LUCY - a stableswap AMM pool on Balancer , where there will be staking for up to 4 different yield sources: liquidation $ETH, $LQTY, $BAL & trading fees. It’s a work in progress, but we expect it to be available soon

Read more about it here: Powerpool

Mimo DAO Proposal

Mimo DAO has a proposal to add $LUSD & $RAI as collateral to mint + borrow the euro (€) stablecoin PAR. This would become the first use case for $LUSD as collateral, and also allow for arbitrage opportunities to open up between dollar stables & euro stables.

Read more about it here: Mimo Dao Proposal

New Introduction video

The team at Liquity have also come up with an explainer video that gives potential users a quick introduction into what Liquity is about!
Watch it here: What is Liquity?

Thanks for reading - if you are bullish on ETH, and would like to leverage up on your ETH position, please have a look below: