Thread by @0xPain_eth

1/ 4pool is a hot keyword recently.

What is 4pool and how it impact Stablecoin market?

$FRAX $UST #4pool

2/ The 4pool is a new Curve pool composed of $UST, $FRAX, $USDC, and $USDT, proposed by @ItsAlwaysZonny recently.

3/ What is the motivation behind?
If you're interested in the DeFi market, you're probably familiar with #CurveWars, which is where DAOs fight for Incentives.

4/ However, "your energy's enermy is a friend", instead of competing with each other and with other opponents, @fraxfinance and @terra_money decide to work together to fight in this game.

5/ What is 4pool’s goals?
There’s 2 goals:
- Become the greatest "savings account" in Crypto market.
- Replace 3pool, becoming the pool with the largest TVL on Curve.

6/ Sam shows us a new perspective on @CurveFinance .
It's a Stableswap AMM? YES!
But it’s also a “saving account” of DeFi. FRAX and UST want to cooperate to bring the super yield to user.

https://twitter.com/samkazemian/status/1510340797253660672

7/ More yield attracts more TVL, 4pool can completely vampire attack 3pool to become highest TVL pool on @CurveFinance . The Metapool model can be changed, previously stablecoin paired with 3CRV, now stablecoin paired with 4pool? That will be huge!

8/ What is the drawbacks?
That's systematic risk. The algorithmic model does not get too much trust from users, this model can help the stablecoin achieve hyper-growth, the weakness is there's no collateral for algorithmic part (for $UST is 100%, for $FRAX is 20%).

9/ If 1 of them get bug / bankrun / death spiral, this will definitely affect the remain. Then, stability will need to be a priority in this partnership.

10/ What is the impact on other stablecoin?
Centralized stablecoin, surprisingly, not much impacted, by $USDC, $USDT can still be provided in 4pool. $USDC and $USDT holders can still earn a high yield.

11/ Decentralized stablecoins will be more affected. DAI will be hit the hardest, as demand for 3pools directly plummets if 4pool launches. Other stablecoins, which have lagged behind in the Curve Wars, are now even worse as $FRAX and $UST are strengthening.

12/ Moreover, they must now also consider whether paired with 4pool to improve liquidity, which means increased demand for $FRAX and $UST. Competing with $FRAX and $UST is currently a difficult problem.

13/ The good thing is, other builders in @feiprotocol , @MIM_Spell , @AlchemixFi will definitely do something asap to stop the $UST, $FRAX expansion and get the traction back.

14/ Also, $FRAX and $UST will certainly not only target "Saving Market", more long-term use cases like Trading value, Transfer value, Store value,... will be their next target.

15/ Yes, the game has just started. Really get excited when thinking about this 🔥🔥🔥

https://twitter.com/stablekwon/status/1510192448450211843