Equilibrium, the Polkadot-based DeFi project formerly known as EOS, is partnering with Curve Finance to bring its automated market maker platform, Curve, into the Polkadot (DOT) ecosystem, according to an announcement released on Monday.
The plan includes integrating a substrate-based version of Curve on Equilibrium’s Polkadot parachain and is supported by the Web3 Foundation’s open grant program.
As previously reported by Cointelegraph, Substrate – Polkadot’s blockchain-building framework – is already demonstrating significant protocol-level interoperability especially in Version 2 launched in August 2020.
Upon full integration, the Curve plugin will allow for a stable currency exchange platform where users can trade DOT-based “currencies” or premium cryptocurrencies such as Bitcoin (WBTC) and Ren Bitcoin (renBTC).
Despite the initial liquidity limitations, Curve’s market-making algorithms will be able to reduce the slippage risks typically associated with trading token issues of the same currency.
Commenting on the risks of opportunistic arbitrage, Alex Milikov, CEO of Equilibrium, told Cointelegraph that the protocol will combine the effective token-swap mechanisms of Curve with Equilibrium’s stimulated liquidity cropping, adding:
“Users will receive up to 20% rewards in EQ tokens for their holdings of liquidity within the AMM pools. AMM groups, in turn, contain“ bulk tokens ”representing the liquidity shares that can be redeemed against the pool, and the price of pool tokens is adjusted according to the current imbalance This makes manipulating liquidity significantly more resource-intensive. “
On the fees, Milikov revealed that the protocol is set up to keep transaction costs at a minimum.
For Michael Egorov, CEO of Curve Finance, the planned merger into Equilibrium’s Polkadot parachain is another indicator of the increased appetite for currency liquidity stability across the various blockchains.
According to Defipulse, Curve is currently valued at more than $ 3.7 billion in the total value of Ether (ETH) locked. The Curve platform is also said to process approximately $ 3 billion in trades per month.
Curve’s integration is in line with Equilibrium’s plan to operate a full-spectrum interoperable DeFi environment as stated during the Polkadot parachain announcement in August 2020.
According to Milikov, Polkadot makes a significant claim in the emerging DeFi arena across the chain, adding: “Most of DeFi is operating in Ethereum at the moment, so Equilibrium with Curve Protocol, which is linked to Ethereum, and Polkadot’s unique architecture, becomes one of the first projects in space Transfers of value through chains. “