Terra's introduction of something called 4Pool seems like a clear move to make UST and another fast-growing algorithmic stablecoin, FRAX, leaders in this niche.
But Curve Finance has become a battleground for any project that can provide the deepest liquidity for its own pool of capital.
These fat returns come in the form of Curve's local governance token CRV, and when you collect enough tokens, you can vote to allocate more token rewards to your particular pool.
Curve is particularly important for staboins because it also provides the deep liquidity needed to maintain the token's peg to the DOLLAR. Illiquid staboins can be easily disrupted if whales decide to buy or sell large amounts of tokens.
Currently, the largest stable coin pool, called 3Pool, provides ultra-deep liquidity for USDC, USDT, DAI, in this case, deep liquidity means $3.2 billion.
Terra's upcoming 4Pool is very similar, including UST, FRAX, USDT, and USDC. To entice people to join, they will also try to make the most of these token rewards on Curve.