Swerve Liquidity Plunges, Curve Breaks Record

curve deposits sep 2020

Swerve is in some trouble with 80% of its liquidity vanishing practically overnight following a change to the weight between the different assets in the pool, called the A parameter. “There was a DAI pegging issue which was selling DAI cheap and was being arb’d. So we had to fix it to restore DAI balance in the pool. Now, it’s in balance,” a Swerve mod says. Swerve lowered the A factor to 100, “which caused minor losses on swUSD (~0.08%),” so the liquidity providers have now left in part perhaps because they not getting cheap dai anymore and the swerve token rewards are not quite the same anymore as the two weeks incentive period has ended. Swerve had some half a billion in liquidity two weeks ago, now it’s less than $100 million in assets with around $25 million in daily trading volumes. What’s more a proposal to fund development…

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