Disclamer
Last updated
Last updated
Curve pools are based on a specialized AMM formula for trading stablecoins with minimal slippage and stable prices. Differing from the standard AMM formula x * y = k, Curve applies a modification focusing on assets with similar prices, providing effective pricing and liquidity for closely correlated tokens. Pools are adapted to the market by adjusting the asset weights, allowing them to maintain stable exchange prices even with changing market volatility. Therefore, it is necessary to pay attention to the liquidity balance of each stablecoin in the Pool Details tab. Go to the original liquidity pool on Curve you are working with, and assess its balance. For example, let's consider the xCRVUSDC pool.
The xCRVUSDC pool consists of six s-tokens, so the pool will be balanced if the share of each asset in the pool constitutes 100/6 = 16.6% of the total TVL of the pool.
If you add one asset to the pool, the share of which is less than 16.6%, you will receive an additional bonus for balancing the pool.
If you add one asset to the pool, the share of which is greater than 16.6%, you will receive a penalty in the form of slippage because this operation worsens the pool balance.
If you withdraw one asset from the pool, the share of which is less than 16.6%, you will receive a penalty in the form of slippage because this operation worsens the pool balance.
If you withdraw one asset from the pool, the share of which is greater than 16.6%, you will receive a bonus because this operation balances the pool.
It should be noted that this example is not a financial strategy, and the imbalanced Easy mode is not always profitable (for example, if the pool is balanced) and also depends on the liquidity volume you are working with: the higher your volume relative to the total TVL of the pool, the more likely it is that the imbalanced method will be disadvantageous and you should use the Balanced mode. To avoid high losses of funds, always consider these factors and the condition of the pool before making a decision about the operation.
Here is an example, how the volume of liquidity you work with can affect the final result when performing the operation.
