Equilibrium, a Polkadot-based DeFi project previously known for its EOS presence, is partnering with Curve Finance to bring the latter’s automated market maker platform, Curve, to the Polkadot (DOT) ecosystem, according to an announcement issued on Monday.
As previously reported, Substrate — Polkadot’s blockchain building framework — is already showing significant protocol-level interoperability especially in the version 2 launched back in August 2020.
Upon full integration, the Curve plugin will allow for a stablecoin exchange platform where users can trade DOT-based “coins” or tokenized cryptos like wrapped Bitcoin (WBTC) and Ren Bitcoin (renBTC).
Despite the initial liquidity limitation, Curve’s market-making algorithms will reportedly be able to minimize slippage risks usually associated with trading tokenized versions of the same coin.
Commenting on the risks of opportunistic arbitraging, Equilibrium CEO Alex Melikhov told that the protocol will combine Curve’s efficient token swap mechanics with Equilibrium’s incentivized liquidity farming, adding:
“Users will receive up to 20% rewards in EQ tokens on their liquidity holdings inside AMM pools. AMM pools in turn have “pool tokens” representing shares of liquidity which are redeemable against the pool, and the price of pool tokens is adjusted according to the current imbalance, making liquidity manipulations substantially more resource intensive.”
Concerning fees, Melikhov revealed that the protocol is set up to keep transaction costs at a minimum.
According to Defipulse, Curve currently sits on over $3.7 billion in total value of Ether (ETH) locked. The Curve platform also reportedly processes almost $3 billion in trades per month.
According to Melikhov, Polkadot is staking a significant claim in the emerging cross-chain DeFi arena, adding: “Most DeFi operates in Ethereum right now, so Equilibrium with Curve protocol, bridged to Ethereum, and Polkadot’s unique architecture, becomes one of the foremost projects in the space of cross-chain value transfers.”