CURL, a project incubated by the Occam DAO, has announced the release of an incentivized testnet in Milkomeda — the primary sidechain of Cardano. During this period, users will be able to familiarize themselves with the platform and qualify for a CURL boost.
Every blockchain — be it layer 1, layer 2 or otherwise — suffers from the fragmentation of liquidity within its ecosystem, and this fragmentation negatively affects users through endless, low-liquidity pools with high slippage on transactions.
Bridges are a major contributor to the fragmentation issue, as it is a natural byproduct of their use. Multiple bridges on an L2 network usually result in the creation of several different synthetic tokens that represent the same underlying asset.
CURL is a protocol aiming to create liquidity aggregation to counter the negative effects that result from liquidity fragmentation on L2s as a result of bridging. CURL solves the problem by aggregating synthetics with the same underlyings, effectively concentrating their liquidity (e.g., madUSDT, celUSDT and sUSDT to curlUSDT, whereby curlUSDT is exchangeable one-for-one into any of the components).
CURL mechanics
CURL is the governance token and lifeblood of the CURL ecosystem. The token allows users the chance to participate in DAO votes that determine critical aspects of the protocol, such as the relative weights of underlying base assets in any given pool, in addition to being the primary reward emission for liquidity providers.
Unique to each pool, hX is a universal synthetic asset and issued at a one-to-one ratio when users provide liquidity in base assets. An example of hX in action would be if a user provided liquidity to a pool containing madUSDT, cUSD and multiUSDT — in this case, they would receive a one-to-one ratio of hX in the form of hUSDT.
The hX synthetic represents a weighted exposure to the underlying base assets in the chosen pool, so in the example above, hUSDT would be pegged to the three stable coins in the pool. This homogenization reduces risk, concentrates the fragmented liquidity of the bridged assets and simplifies the experience for liquidity providers.
The market for wrapped tokens in the crypto space is over $10 billion. This figure is only trending higher with time, and almost all of these wrapped tokens are fragmented across hundreds of protocols. Imagine a one-stop-shop for liquidity providers that takes this massive amount of fragmented liquidity, then homogenizes and concentrates it into highly liquid multiasset pools for a farming experience like no other — welcome to CURL.
CURL’s multi-asset pools offer an incentive to maintain the equilibrium between the pooled base assets: a “CURL Premium.” Users may receive a greater CURL premium for providing liquidity in the form of an asset that balances the pool in question. In this manner, liquidity providers who balance the deviations between actual and theoretical distributions (thereby bringing the system closer to equilibrium) will receive greater CURL rewards.
Incentivized testnet in Milkomeda
CURL has just announced the release of an incentivized testnet in Milkomeda — the primary sidechain of Cardano. During this period, users will be able to familiarize themselves with the platform and qualify for a massive CURL boost.
During mainnet, which will come a few weeks after testnet, users will be able to receive double the CURL premiums they would normally receive for providing liquidity to the pools.
CURL will be launching its liquidity aggregation solution in Milkomeda C1 for the following four assets: USDC, USDT, BTC and ETH.
Here are some additional details on how the launch will look:
- CURL will launch community activities to incentivize the adoption and usage of hX assets.
- During the first 12 months of protocol deployment, in order to amplify initial adoption, users having participated in the testnet will be whitelisted to have a twofold boost on CURL premiums they are receiving.
You can participate on the incentivized testnet here.