Forex based currency swap

[minqin]

Hi Curve Project,

This is Min, a developer working in the traditional Quant / high frequency trading industry.

We just launched a new asset backed stablecoin in Hong Kong ( https://onecash.asia/), including HKD, CNH and JPY. I'm wondering if it's possible to add currency liquidity pool on curve fi

In your design, the core formula is this:
Sum (Xi * Wi ) = const.

If you use a forex rate from oracle as Wi, it will become a nice forex swap liquidity pool very naturally.

[minqin]

For example, if CNHC/USDC forex rate is 6.5,
Then:
Weight (CNHC) = 6.5 / (6.5+1)
Weight (USDC) = 1 / (6.5+1)

It will enforce 1 USDC has corresponding 6.5 CNHC in the pool, if not, there is arbitrage opportunity

[MODERATOR10]

Hello @minqin please explain further and state how this can benefit us