This proposal seeks to deploy a Uniswap V3 sdYND/WETH liquidity pool to address the liquidity constraints of the existing sdYND/YND pool on Curve Finance. The Uniswap pool will enable arbitrage opportunities, stabilize price parity between sdYND and YND, and provide additional liquidity provider (LP) opportunities, further insulating the YieldNest ecosystem from potential liquidity depletion.
The current sdYND/YND pool on Curve Finance is the only mechanism for exiting sdYND back to YND. This creates a structural issue: If demand for YND decreases or multiple entities unwind their sdYND stakes, the pool risks rapid depletion of YND. Without an alternative liquidity venue, this could lead to significant price disparities and liquidity shortages, threatening the stability of the sdYND ecosystem.