SIP ? - Adding CRV long synth sCRV

I have submitted a SIP with details regarding adding CRV to synthetix as a tradable synth. I have added some basic liquidity data, please be aware that DelphiDigital’s report mentions decentralized platforms have a larger risk of upwards price manipulation due to the AMM mechanism and there being no ceiling compared so these should be considered secondary to the centralized markets.

Centralized market data was collected from coingecko and decentralized market data was collected directly from Uniswap and Sushiswap.

I am having trouble pull requesting the SIP so I’ll add the main body of the request below if anyone wants to discuss it.

Adding the CRV token will enable the trading of CRV inside the synthetix ecosystem benefiting traders including dHedge who wish to include this token in their portfolio. It will also enable the creation of a Curve same-price pool of the native CRV token with sCRV. The lead developer of Curve, Michwill, has stated he has previously had large buyers express a desire for an on-chain method of acquiring CRV and this would likely drive volume via the Curve x Synthetix to Synthetix as a slippage free trade mechanism.

Further trading volume is likely to be generated as CRV has liquidity mining for the next 4 years and so there will be a steady flow of people looking to buy or sell large quantities of CRV which can be captured via this token and the mentioned curve pool.

Delphi Digital has not done an assessment of CRV’s available liquidity however Uniswap has an ETH/CRV pool with total liquidity $5.5million (half is CRV), Sushiswap also has an ETH/CRV pool with total liquidity of $10.9million (half is CRV again).

It is also listed on centralized exchanges Binance, Huobi, OKEx and Kraken. Seeing daily volume of 100, 62, 68, 2.8 mill on each respectively with -2% depth of 466,000 , 243,000, 429,000 and 55,000 and +2% depth of 265,000, 330,000, 356,000 and 158,000 respectively. These limits exceed Delphi Digitals 2% boundaries by 4x if compared to REN on Binance whilst nearly matching FIL’s -2/+2% boundaries. Both REN and FIL were deemed to have strong liquidity and approved for listing on Synthetix by Delphi Digital.

Currently synthswaps on Curve are mostly going in one direction from stablecoins/BTC into Synthetix that are then mostly being used to farm on Curve’s pools as sETH, sEUR or sBTC. This creates a pool imbalance that can disrupt the sUSD peg as sUSD is first bought from the sUSD pool then converted to the relevant synth. This reduces the balance of sUSD in the curve pool.

Adding sCRV should help this imbalance as it is likely people will wish to go from CRV > sCRV > sUSD > any stablecoin . This action will deposit sUSD in the curve pool and remove another stablecoin from it, helping the peg. The long term fix for this is to have a variety of sPools on Curve to even out directions and promote lots of different arbitrage.

SIP link added SIP-107: Add CRV crypto synth

Built using Etherscan’s holder graphs, these charts provide some evidence that decentralized price sources for CRV are unlikely to be owned by one party who could then manipulate liquidity to move the price as an exploit. The Sushiswap graph is admittedly not very useful given nearly all LP holders then stake with Sushi for their rewards making any direct analysis difficult. Further statistics for other sources of liquidity are being worked on and will be presented when ready.

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Basis points from current price
factor 25 50 75 100 150 200 400 600 800 1000
pair side stat
CRVUSDT asks mean 53,610 117,903 156,767 184,013 255,506 318,169 541,465 943,378 1,406,816 1,913,608
CRVUSDT asks median 54,142 95,643 126,877 171,945 265,317 309,523 519,553 912,836 1,465,902 1,886,439
CRVUSDT asks std 14,865 54,146 60,619 62,691 44,110 80,793 124,131 170,860 286,012 484,690
CRVUSDT bids mean 50,138 94,598 178,907 250,851 339,244 385,112 572,173 789,053 982,364 1,237,267
CRVUSDT bids median 38,935 81,633 165,246 231,844 340,055 375,150 559,545 787,679 969,873 1,226,249
CRVUSDT bids std 43,327 46,059 102,637 60,933 92,705 98,576 155,702 163,044 179,310 254,423
pair timestamp weightedAvgPrice volume
CRVUSDT 1617081955 3.37928162 21538676.84
CRVUSDT 1617105943 3.36301272 17624058.36
CRVUSDT 1617149148 3.30531381 15276337.33
CRVUSDT 1617192352 3.17528033 16320389.77
CRVUSDT 1617235556 3.12739792 14890781.7
CRVUSDT 1617278760 3.12825492 13202315.69

Average Bid/Ask spread over the week: 7.681 basis points
Provided by Kaleb, statistics gathered on the liquidity of CRV USDT on Binance.com

Further market depth statistics I’ve collected over time.