Curve Yield Farmers rush to commit $60 million to newly launched Conic Finance, securing 21% APY on USD Coin

A new yield-earning tool from popular stablecoin swapping service Curve has attracted over $60 million from depositors just over a week after its launch.

Conic Finance, which went live on March 1, allows users to deposit tokens into its Omnipools, a new product that diversifies exposure across the Curve ecosystem while increasing rewards.

Each omnipool distributes the liquidity of a single asset across different curve pools. All Curve Liquidity Provider (LP) tokens will be staked on Convex to increase Curve Rewards Yield (CRV). Convex (CNX), another Curve ecosystem token, is also rewarded, as is Conic (CNC), Conic’s native token.

Conic users can earn an annual return of up to 21% with the three Omnipools for Dai (DAI), Frax (FRAX) and USD-Coin (USDC). The USDC pool alone has attracted over $50 million in liquidity as Conic currently offers one of the highest yields available in the crypto market for USDC. Frax and Dai’s deposits are significantly lower at $7 million and $5 million, respectively.

Holders can lock their CNC tokens to vlCNC to participate in Conic governance and directly control how liquidity is distributed across Curve pools by participating in Conic’s Liquidity Allocation Votes (LAV) – which determines the stake determine the liquidity of an omnipool that a curve pool can receive.

In the coming weeks, demand from Conic traders for its revenue-generating products could ultimately generate value for its own CNC token.

Therefore, CNC tokens are currently trading at $8 and have lost 4% in the last 24 hours, with a market cap of $32 million.

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

Curve tokens (CRV) are issued as yield farming rewards to liquidity providers on Curve Finance and can be converted into voting trust-linked CRVs (veCRV). By holding veCRV, users can participate in platform governance, earn higher rewards and fees, and receive airdrops.

The tokens are time-locked, meaning users are incentivized to lock their CRV for a long time to earn more veCRV and platform rewards. However, this mechanism effectively blocks liquidity and imposes opportunity costs on users.

This is where protocols like Conic come into play, allowing users to access or provide liquidity to the Curve ecosystem to get rewarded without having to lock up their tokens for long periods of time by depositing directly into Curve.

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