Archimedes Finance has announced the launch of its Liquidity Pool on Curve today as part of its two-phase launch on the Ethereum mainnet. Archimedes’ marketplace is designed to provide leverage and NFTs for borrowers, as well as sustainable, real yield earning opportunities for liquidity providers. Archimedes allows DeFi users to earn top of the market APY returns with their stablecoins, projected to start at ~15% for liquidity providers.
At the core of Archimedes is its leverage engine. With this mechanism, Archimedes is able to provide borrowers with up to 10x leverage on their own yield-generating assets. The leverage is powered by incentivizing LPs (liquidity providers) to park their otherwise idle stablecoin assets in the Archimedes 3CRV/lvUSD liquidity pool, a pool made up of all stablecoins, on Curve Finance. This specific stablecoin pairing of 3CRV and lvUSD, Archimedes own internal stablecoin, provides the LP a more passive yield generating experience, and an APY that consistently competes for best in the industry.
What this means for Liquidity Providers:
By having the liquidity pool on Curve, it is ensured that Archimedes never has custody of liquidity provider funds. This means that users are able to remove their liquidity from Curve, one of DeFi’s most trusted stablecoin DEXs, at any time.
Liquidity provided in the Archimedes pool is put to work in a way that not only rewards LPs with sustainable top of market APY, but also allows those active on the borrowing side of Archimedes to take out leverage using one of Archimedes’ whitelisted leveraged yield strategies.
The more liquidity Archimedes attracts, the more leverage it can loan out to borrowers, which in return creates a cycle of yield that satisfies both parties. It’s a great opportunity for borrowers seeking a leverage yield choice, and an equally great opportunity for lenders that have a smaller appetite for risks than their borrower counterparts.
What issues Archimedes is solving for LPs:
Currently in DeFi users that provide liquidity (LPs) are faced with challenges including:
Transparency on where yields come from
Over-inflation of rewards tokens
The need to actively manage and maneuver their liquidity position (known as mercenary liquidity) to earn top of market yields
From user interviews, the Archimedes team found that most LPs are frustrated with the lack of transparency around how a project generates their yields. This is not only true for CeFi, but also within most DeFi projects.
Archimedes LPs earn fees from users that borrow leverage. These fees include an origination fee whenever a borrower opens a leveraged position, and a performance fee, which actively distributes 30% of the yield from leveraged positions back to LPs. Since Archimedes only deals with blue-chip yield-generating assets, these are the same tokens that LPs receive as a reward – along with ARCH tokens.
Overinflation and “Sticky” Liquidity
While some DeFi projects have rewards tokens that have no max supply or utility other than governance, the Archimedes ARCH token is a stark contrast. Not only does ARCH have a max supply, the 3CRV/lvUSD pool also abides by a dynamic emissions schedule. The dynamic emissions schedule was created to tackle the potential issue of ARCH tokens over-inflating, which helps Archimedes LPs receive top of market yields over the long-term. The emission rate of ARCH tokens is adjusted every 2 weeks to ensure that the token is keeping up with the top 10 available APYs in the market.
ARCH Token Has Utility
Borrowers need LPs for leverage to be made available. This means that Archimedes' leverage is scarce and can be depleted leading to no new leverage positions being available until more LPs join the pool. LPs are rewarded with a valuable asset which borrowers need in order to obtain access to what leverage is available. Thanks to the ARCH token having a utility that is needed by borrowers, there is less incentive for LPs to simply sell ARCH tokens. This gives Archimedes liquidity providers more control over the system than other projects that need to rely on a governance vote in order to make an impact.
Learn more about the Archimedes project and how it generates real, stable top of market yields for investors by visiting https://archimedesfi.com/ and following on Twitter and Discord.
Archimedes is building a leading lending/borrowing market on top of any AMM. In essence, the project’s vision is to create a sustainable, long-term, and accessible set of opportunities within DeFi for billions of people through an innovative and scalable technology solution. By solving the pool reward sustainability issue, offering 10x leverage for yield-generating stablecoins, and increasing capital efficiency, Archimedes is supercharging stablecoin assets and making it easier for investors to generate high APYs without any of the pool hopping or portfolio management and capital deployment overheads currently faced by DeFi investors. Learn more about the project at https://archimedesfi.com/.
Source: Throne PR
Release ID: 525820
Original Source of the original story >> Archimedes Launches Liquidity Pool on Curve