FastBridge for crvUSD from L2s

Proposals
1

Summary:

FastBridge is a workaround solution for 7-day delay from L2 native bridges by pre-minted crvUSD.

Proposing Debt ceilings:

Arbitrum: 300k USD
OP mainnet: 200k USD
Fraxtal: 150k USD

Abstract:

Take risks of native bridges in favour of peg stability and UX on L2s.

Motivation:

crvUSD peg is not resilient on L2s making LlamaLend a harder business. Bad peg comes from slow bridge-back and low incentives from volume and TVL, what comes to be a chicken-and-egg problem. Allowing a new fast route for crvUSD opens prospects for LlamaLend growth and other solutions to take place(such as Across integration, etc).

Specification:

Thorough overview can be found in ChainSecurity audit response.

FastBridge includes committing bridge transaction from L2 and releasing “unbacked” crvUSD to the user via LayerZero messenger.

LayerZero: messages will be proven by 2/2 DVNs:

  1. LayerZero team
  2. Curve core developers (SwissStake) with maximum conservative setup

Finalizing bridge (and committing bridge transaction for OP bridge) is hard to be incentivized directly on-chain, so our keeper will do it for users (though, it’s permission-less and anyone is able to run it). Initially transfers will be fee-free, but after 1-4 weeks as we have data on usage will set fee to cover expenses for operation of this keeper.

Emergency DAO is set to stop any mints as long as second DVN can be turned off.

Code: GitHub - curvefi/fast-bridge
Audit: fast-bridge/audits at main · curvefi/fast-bridge · GitHub
Parameters: curve-guidelines/crvusd/fast_bridge.py at main · curvefi/curve-guidelines · GitHub

Arbitrum

pool_name avg_price_1m stddev_from1_1m avg_price_3m stddev_from1_3m avg_price_6m stddev_from1_6m
crvUSD/USDC 0.9985 0.00087 0.9991 0.00096 0.9991 0.001
crvUSD/USDC.e 0.9985 0.00089 0.9991 0.00096 0.9991 0.001
crvUSD/USDT 0.9985 0.00086 0.9991 0.00096 0.9991 0.001

crvUSD on Arbitrum: 3.7m
Proposed FastBridge cap: 300k

OP mainnet

pool_name avg_price_1m stddev_from1_1m avg_price_3m stddev_from1_3m avg_price_6m stddev_from1_6m
crvUSD/USDC 1.0001 0.00038 0.9994 0.001 0.9989 0.0013
crvUSD/USDC.e 1.0001 0.00037 0.9994 0.001 0.9989 0.0013
crvUSD/USDT 1.0001 0.00038 0.9993 0.001 0.9989 0.0013

crvUSD on OP mainnet: 1.9m
Proposed FastBridge cap: 200k

Fraxtal

pool_name avg_price_1m stddev_from1_1m avg_price_3m stddev_from1_3m avg_price_6m stddev_from1_6m
crvUSD/Frax 0.9985 0.0011 1.0000 0.0018 1.0004 0.0027

Fraxtal is becoming its’ own L1 and soon all bridge transaction will be as fast as LayerZero. This is a temporary solution until their update is in prod.

crvUSD on Fraxtal: 1.6m
Proposed FastBridge cap: 150k

For:

  • Better peg on L2s
  • Better UX for crvUSD cross-chain

Against:

  • Extra risk for crvUSD
  • Can be a lower debt ceiling

Poll:

Will be put up after LlamaRisk review.

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