Curve – CRV

Latest coin reports

Table of Contents

Curve – CRV

5 minutes
Contract adress: 0xd533a949740bb3306d119cc777fa900ba034cd52

Curve is a decentralized exchange for stablecoins, Bitcoin and Ethereum. By focusing on stablecoins, Curve Finance offers extremely low slippage costs and offers liquidity providers no impermanent loss. When looking to trade stablecoins in a decentralized manner, Curve will usually offer the best prices. 

What is Curve – CRV?

Curve Finance is a decentralized exchange (DEX) that provides trading of stablecoins or tokens within the same price range, such as the wrapped versions of Bitcoin and Ethereum.

On Curve, about 37 pools are active with which one can swap or provide liquidity. This includes yield-bearing token pools where users can deploy their yield-bearing tokens obtained from other protocols, in order to earn underlying yield, as well as the proceeds derived from swap fees.

This review of Curve – CRV was created for informational purposes. This article is not intended for promotion.

General info about Curve – CRV

The liquidity pools are managed and controlled by the automated market makers (AMM). That is, when a token is swapped, the AMMs will rebalance the pools.

When a pool gets out of balance, the AMMs will reduce the price of the token encouraging traders to purchase it. This will attract arbitrageurs who will rebalance the ratio.

How is the Curve protocol structured?

Another big difference from the AMMs of, say, Uniswap, is that Curve does not exchange to Ethereum. Uniswap exchanges token A for ETH, then ETH for token B, leaving the user with double transaction costs to pay.

Curve will swap to the desired token in one transaction, keeping transaction costs lower. Curve exchanges token A directly to token B within a single transaction.

Curve Token

The governance token, Curve was launched in August 2020 and has several purposes.

Curve token will serve as:

  • Reward: In the form of Curve emissions, liquidity providers will be lured into Curve pools. This additional incentive is used to lure liquidity.
  • APY Boost: By locking Curve tokens in exchange for veCRV, for a x-number of time, users can get an APY boost.
  • Voting Power: The number of Curve tokens a person owns will determine their decisive power when it comes to votes or proposals regarding ‘payouts LPs, future decisions, token burns,…’Individuals who have owned the token for a longer period of time have more say than those who would just purchase CRV.

Tokenomics

The Curve token has an inflationary model (Max Supply: 3.3 billion) but also has deflationary pressure due to the possibility of locking CRV on the platform in exchange for veCRV and the associated APY boost.

The Team & Roadmap

Curve was founded by Russian Michael Egorov. He studied at the Institute of Physics and Technology in Moscow where he earned his Ph.D. In 2014 he moved to the US where he worked for LinkedIn before founding the data encryption company, NuCypher in 2016.

Together with a small group of developers and community managers who are anonymous, he has been keeping the Curve platform running since 2020.

Twitter profile picture – Michael Egorov

White paper

For a detailed explanation of the Curve protocol we would like to refer you to the white paper page. It contains 3 different white papers that explain Curve stableswap, Curve Pools and Curve DAO.

Use case of Curve – CRV

Curve users earn income in a variety of ways.

  • Trading Fees: Liquidity providers receive a portion of the profit that results from each transaction within the liquidity pool (0.04%). The more volume, the more profit for LPs. The payout happens according to the stock you provide liquidity for.
  • veCRV tokens: Users are given the option to lock (escrow) CRV tokens in order to obtain an APY boost (up to 2.5x). In exchange for locking this up, one will receive veCRV (vote-escrowed CRV). veCRV holders are entitled to 50% of the Curve platform’s trading fees. Follow the lock up of CRV live here.
  • Boosted pools: Some pools will offer additional ‘incentives’ for providing liquidity. This will vary from time to time. Boosts are paid out in CRV or other native tokens of the Blockchain on which Curve is deployed.

Stable liquidity pools

Curve allows its users to provide liquidity in a stable manner, avoiding the extreme volatility. Curve does this by limiting the supply of tokens and focusing on stablecoins.

Curve’s liquidity pools also include tokenized versions of Bitcoin and Ethereum, which of course will also mean no impermanent loss for liquidity providers.For a complete overview of all active pools on Curve, be sure to check here.

Composability

Curve attracts liquidity providers by using what is called composability in DeFi. This simply means that investments on Curve can be used on other protocols and vica versa to earn additional rewards.

Total value locked (TVL)

The total locked value that is fixed on the Curve platform hovers around $10 billion. Curve has since plotted against Ethereum, Polygon, Fantom and xDai. We can only conclude that Curve isn’t stopping anytime soon.

(Total value locked on Curve Finance, by DeFi Pulse)

What do we think about Curve – CRV?

Curve has become one of the most popular platforms in the DeFi ecosystem. It does not focus on volatility or speculation, but by using stablecoins, it can focus on stability and compatibility.

Because of Curve’s composability, the platform is deeply intertwined with the entire DeFi ecosystem.

Thus, Curve is not only used by Yield farmers like you and me but also provides liquidity to major protocols like Yearn, Synthetix and Compound, which are perfectly compatible with the Curve protocol. The future of Curve is potentially great.

Curve – CRV conclusion

Curve Finance guarantees the lowest amount of slippage when exchanging stablecoins in a decentralized manner. Liquidity providers no longer have to worry about lossy impermanent loss or risky ‘degen’ yield farming. Yet the Curve platform is not that simple to use. Therefore, it is important to do further research before making investments.

Crypto_Library_logo_512x512_svg

Disclaimer: Trading and investing in cryptocurrencies (also called digital or virtual currencies, altcoins) involves a substantial risk of loss and is not suitable for every investor. You are solely responsible for the risk and financial resources you use to trade crypto. The content on this website is primarily for informational purposes and does not constitute financial advice.