Blueshift and OccamX partnership manifesting new technological advances
Jun 16, 2022
Blueshift team, in a collaboration with OccamX, has recently announced the development of a new project named CURL.
CURL is a novel protocol that aims to overcome the issues of liquidity fragmentation, while utilizing the proven technology contained within the Blueshift DEX.
Blueshift’s innovative infrastructure has successfully introduced the DeFi 2.0 to Cardano and Milkomeda communities by utilizing liquidity portfolios instead of pools for holding liquidity — unlocking a new era of decentralized finance.
Liquidity portfolios are the fundamentals of the whole protocol since they are allowing users to provide liquidity with a single token, instead of token pairs, which results in less swapping for wrapping and liquidity provision.
This offers a couple of benefits for its users.
As Blueshift’s liquidity portfolios contain dozens of tokens, the impermanent loss is spread all over the tokens in a specific portfolio, therefore reducing the impermanent loss by up to 10 times in comparison to traditional liquidity pools!
High price slippage is also very well resolved via the ‘Blueshift Reserve Model’. The virtual token pairs are defined as the present liquidity in every portfolio that share liquidity within them. This means that when a swap occurs, virtual pairs are constructed based on the reserve model — the process which significantly reduces the price slippage.
The new approach has attracted a significant amount of liquidity to the protocol making the Blueshift DEX the second rank in terms of TVL of all Milkomeda protocols! The liquidity is spread through a variety of different portfolios containing specific types of tokens, and users can decide which one suits them the most for investing.
It is expected that many more partners and portfolios will get established on the protocol shortly which will give even more options for providing liquidity and enjoying the high APRs Blueshift is proposing.
The previously described technology will be the foundation of the new protocol the Blueshift team is developing alongside OccamX which is intended to bring homogenized concentrated synthetic liquidity to Layer2 chains.
Let’s dive into the arising challenges of DeFi 2.0 that the CURL protocol is aiming to overcome!
When a real-world asset, such as USD, is moved on-chain to a given L1 blockchain, it creates a vector of possible synthetic assets, such as DAI, USDC, USDT, etc.
When these assets are moved cross-chain, the vectors turn into a matrix (i.e. b1DAI, b2DAI) because they are coming from different bridges, eventually leading to liquidity fragmentation.
L2 synthetics are non-fungible which means that they cannot be interchanged although they are relating to the same token, i.e. USDT. In other words, this reduces the full global liquidity potential while creating more economic costs due to the multiple versions of the same token. The alphabet soup that is getting created due to the bridges (i.e. madUSDT, cUSDT, multiUSDT) also makes the system less attractive to liquidity providers.
Taking Blueshift as an example, there is USDC in 3 different portfolios, all with different prefixes, depending on which bridge was used. With the growth of TVL, the problem of liquidity fragmentation will become increasingly painful for both the team and users.
That’s why CURL was born. Through CURL the OccamX and the Blueshift team will unleash the true power of the DeFi universe!
What is CURL?
CURL is a protocol that enables the accommodation of synthetic liquid tokens across L2 solutions by combining unique liquidity pooling and issuing a homogenized synthetic asset that represents a weighted exposure to all underlying synthetics, effectively making them fungible.
In other words, CURL allows the generation of exactly one L2 synthetic for every underlying L1 asset. For example, madUSDT, multiUSDT, cUSDT can all be pooled to create hUSDT — a universal representation of the underlying USDT that can be used on the L2 network.
The mission of the project is to significantly improve the efficiency of L2 ecosystems by harmonizing the liquidity flows. Every hX token, which is the synthetic token that homogenizes the bridged assets, is connected to a dedicated liquidity pool.
Pools are made of assets that came from different bridges but represent one token (i.e. USDC). The CURL protocol will allow for the provision of any bridged token X to a pool of the same underlying token X, while returning a homogenized, universal token (hX) and the CURL token with different functionalities.
This way, the CURL protocol is auto-balancing the tokens in the pool, and depending on the balance, users receive different amounts of hX and CURL!
OccamX and Blueshift are the two leading DEXs in the Milkomeda ecosystem combining for more than 80% of Milkomeda’s TVL. Both teams have realized that issues like liquidity fragmentation are significant barriers to further growth.
The CURL protocol is the answer to these concerns and a collaboration between two experienced teams was inevitable. The CURL protocol will benefit from the strong partnerships and connections to the bridges that both teams already have established.
Moreover, the collaboration will offer a wide range of benefits for bridges, DEXs, and liquidity providers.
The CURL protocol will make the perfect synergy across bridges due to the creation of a central, harmonized “marketplace” for liquidity while enabling instant liquidity for bridged synthetics. Bridges will also benefit from the greater demand for liquidity generated by the homogenizing activity.
At the same time DEXs will be given access to a single, yet harmonized marketplace for bridged tokens which will simplify protocol operations and concentrate synthetic liquidity.
When it comes to liquidity providers, the CURL protocol is giving them enhanced rewards for keeping the so-called ‘Equilibrium’ in balance and at the same time reducing the risk of losing their assets.
The CURL protocol is currently in the development stage and the launch of the testnet on Milkomeda is planned for July, while the launch on mainnet is aimed for August and September.
With the launch on Milkomeda, CURL will combine all ingredients for gaining traction, such as liquidity, liquidity providers, bridges, and the community at large since OccamX and Blueshift DEXs cover 80% of Milkomeda TVL.
The CURL team’s ambitious roadmap contains launches on other chains as well, with the first targets being Optimism, Arbitrum, and Moonbeam!