On July 2nd, Andre Cronje, the programmer behind Yearn Finance, announced a new project that he was launching: Fixed Forex.
The interesting thing is that the project is notable for being built upon the Curve protocol for stable coin liquidity….a protocol with low slippage and minimal impermanent loss.
Although the project is experimental (and currently unaudited), the concept is bold and potentially a groundbreaking use-case for decentralized finance (defi).
To understand the potential significance of this project, it is important to understand the massive amount of volume which moves through the traditional finance (tradfi) Forex market everyday.
The foreign exchange or forex market is the largest financial market in the world – larger even than the stock market, with a daily volume of $6.6 trillion, according to the 2019 Triennial Central Bank Survey of FX and OTC derivatives markets.
If Fixed Forex was able to take even 1% of the transaction volume away from tradfi…that would be 66 billion dollars moving across the Curve protocol every day.
Fees and pool parameters are decided by the Curve DAO. Currently, the fee on all pools is 0.04%, of which 50% goes to liquidity providers, and 50% to veCRV holders (members of the DAO). As such, veCRV holders get .02% of all transaction fees.
.02% of 66 Billion daily fees is: 13,200,000 a day.
Since rewards inception on 10/7/20, a total of $30,059,590.81 has been generated for stake holders. Imagine if forex volume could equal those rewards in 2.5days. On chain growth would be extraordinary with significant value accrued by stake holders.