Curve Yield Farmers Rush to Deploy $60M on Newly Launched Conic Finance, Capture 21% APY on USD Coins

A new tool to capture returns from prominent stablecoin exchange Curve has attracted over $60 million from depositors just over a week after launching.

Conic Finance, which went live on March 1, allows users to deposit tokens into their omnipools, a new product that diversifies exposure across the Curve ecosystem and increases rewards.

Each omnipool allocates the liquidity of a single asset to different curve pools. All curve liquidity provider (LP) tokens are staked on Convex to increase curve (CRV) reward revenue. Convex (CNX), another curve ecosystem token, is also rewarded, as is conic (CNC), Conic’s original token.

Conic users can earn up to 21% annual returns on the three omnipools for dai (DAI), frax (FRAX) and USD Coin (USDC). The USDC pool has attracted over $50 million in liquidity alone, as Conic currently provides one of the highest available returns in the crypto market for USDC. Deposits of frax and dai are significantly lower at $7 million and $5 million respectively.

Holders can lock their CNC tokens for vlCNC to participate in Conic governance and directly control how liquidity is allocated across Curve pools by participating in Conic’s Liquidity Allocation Votes (LAVs) – which determine the proportion of an omnipool’s liquidity as a Curve -pool can receive.

In the coming weeks, Conic’s demand among traders for its yield-generating products may eventually generate value for its own CNC token.

As such, CNC tokens are currently trading at $8, losing 4% in the last 24 hours with a market cap of $32 million.

Curve uses smart contracts to provide an efficient way to exchange stablecoins while maintaining low fees and low slippage, according to developer documents. Depositors on Curve earn annual returns of up to 4% from one of the many pools on the platform, which lock up $5 billion worth of Ethereum-based tokens on the platform.

Curve tokens (CRV) are issued as return rewards to liquidity providers on Curve Finance, and can be converted to vote depository CRV (veCRV). By holding veCRV, users can participate in platform management, earn higher rewards and fees, and receive airdrops.

The tokens are time-locked, meaning users are encouraged to lock the CRV for a long time to receive more veCRV and platform rewards. However, this mechanism effectively locks up liquidity, creating opportunity costs for users.

This is where protocols like Conic come into play, allowing users to gain exposure to or provide liquidity to the Curve ecosystem to be rewarded without having to unlock tokens for long periods of time by staking directly on Curve.