Today, stable coins have been playing a particularly important role in DeFi decentralized finance, especially with the advent of Yield Farming.
Along with that, the demand for transactions between stable coin pairs is increasing, that’s when Curve Finance be effective. Together with Uniswap, Curve currently in TOP AMM in the market. This article will help you find out what Curve Finance is and why it attracts such a high number of TVLs!
What is Curve Finance?
Curve Finance (CRV) is a decentralized exchange (DEX) with a similar model to UniSwap. However, a special feature compared to Uniswap is that Curve is designed specifically for Stablecoins or Crypto Assets pegged 1:1 with equal value (eg sBTC,renBTC,wBTC…) effectively, allowing users to trade stablecoins with slippage and low transaction fees. In addition, Liquidity Providers (LPs) will also receive transaction fees and lending interest from Compound or yEarn.finance.
Curve is non-custodial but not permissionless. Currently only Curve can create pools. In the future, Curve may allow other projects to create Pools.
Curve Finance is not only a place to trade Stable Assets, the project is growing with the launch of many new features and new products. Some new features can be mentioned such as: Lending Pool, Base & Metapool,… New products include Synthswap- 1 product that Curve Finance combined with Synthetix,…
Compare Curve and Uniswap?
In fact, the feature of Curve is almost the same as Uniswap. But in terms of operation, they contain a relatively large difference.
For Uniswap, when you want to trade a stable coin pair, two transactions will immediately form:
- Stablecoin A is traded for Ethereum (ETH)
- ETH will trade with Stablecoin B.
From there, the transaction fee you will have to pay is up to 2 times.
Curve is also for liquidity providers and has the same facilities as Uniswap, but it is not subject to impermanent loss. That’s because on Curve, stablecoins can trade directly with each other. Therefore, you only have to pay a one-time transaction fee of 0.04%. Curve’s algorithm is also designed to minimize slippage. This is why some call Curve a better version of Uniswap, made for stablecoins.
Curve Finance’s target audience
The audience that Curve Finance targets include: Liquidity Providers (liquidity providers), Traders and projects.
- Curve’s Liquidity Providers can receive token rewards from projects and receive fees from pools, in addition to lending interest.
- Traders: Swap stablecoins with low slippage, much cheaper fees than CEX.
- Project: Want to allocate tokens and bootstrap demand for project tokens
How liquidity providers make money
Liquidity Providers will create a liquidity pool that is a group of tokens in smart contracts. Curve incentivizes these vendors by rewarding them in different ways:
- Transaction Fees: Liquidity providers will receive a transaction fee every time a user trades a stablecoin on the platform.
- Interest rate: Some groups enjoy interest from lending.
- Incentives: Some pools also offer incentives.
- Bonus: By offering a specific token to a low-stakes liquidity pool, you can earn bonuses.
Main application of AMM Curve Finance
Curve Finance allows trading of assets with a ratio of 1:1, including:
Stablecoin Trading: Some Stablecoin Pools on Curve can be mentioned as:
- 3pool: Pool includes 3 stablecoins DAI, USDC, USDT.
- sUSD: Pool of 4 stablecoins sUSD, DAI, USDC, USDT
Trading Synthetic/ Wrapped Assets: Some Pools on Curve can be mentioned as:
- sBTC pool: includes 3 renBTC/ wBTC/ sBTC assets.
- ren pool: includes 2 renBTC/ wBTC assets.
Provide 1 liquidity above Curve Finance
The next special feature of Curve Finance is when you can only provide liquidity from 1 type of token. It will perform the operation to automatically split this token into tokens at the rate corresponding to the pool.
For example, if you deposit 100 USD into sUSD, now Curve will automatically divide 100 USD per day into 25 USDT, 25 USDC, 25 TUSD, 25 sUSD if the ratio in the pool is 25%, for each token.
DRAWThe Liquidation Withdrawal process will take place in reverse, you pay LP tokens and receive the tokens you want.
Providing 1 side liquidity in Curve will you benefit?
- No impermanent loss and price volatility: Because you are providing 100% stablecoin liquidity.
- Bonus: This is a pretty special part when it comes to providing liquidity in Curve.
Below is an illustration when I deposit 2000 DAI into Pool 3pool. The amount of Bonus that I will receive is 0.061%.
Other special features/products:
All these features are built on top of AMM Curve Platform + Dev’s Applied Mindset, making Curve Finance more than just a place to trade Stable Assets.
Special features include:
- CRV token Incentives.
- Pool Lending.
- Base and Metapool.
- Synthetic Swap (will be available in Curve V3).
What is CRV?
Curve DAO Token (CRV) is a governance token in the Curve Finance ecosystem, used for governance purposes, CRV holders can participate in deciding on changes in the whole system.
Some basic information about CRV . token
- Token name: Curve DAO Token
- Ticker: CRV
- Blockchain: Ethereum
- Token Standard: ERC-20
- Contract Address: 0xd533a949740bb3306d119cc777fa900ba034cd52
- Total Token Supply: 3,303,030.299 CRV
- Circulating token Supply: 329,707.148 CRV
Token Allocation – Token Distribution
The maximum total supply of CRV Tokens is 1.3 billion tokens and is distributed in parts as follows:
- 61% goes to liquidity providers through liquidity mining.
- 31% is held by shareholders with a vesting period of 2-4 years.
- 3% belongs to employees with 2 years vesting.
- 5% is the burnable reserve (will be burned if not used).
CRV is distributed under Liquidity Mining with the amount of 2 million CRV per day and this CRV number will not be locked. The amount of CRV owned by Liquidity Providers, team and shareholders is vested continuously every second.
Token Use Case
CRV Token currently has the following functions:
- CRV token holders are entitled to participate in voting on future proposals
- Paying long-term liquidity providers
Current CRV rate
Where to buy-sell CRV
Currently CRV is being traded on many major CEX and DEX exchanges such as: Binance, Coinbase, Huobi, Sushiswap, Uniswap, etc.
Curve Finance It started out as an AMM for Stablecoin trading but now the project is going much further than that. Trading volume on Curve has increased due to the introduction of new pools and as investors want to make trading between assets easier.
I believe that, when people read this far, they have grasped and understood the necessary information and data of the token. CRV already.
Hopefully from the information and data provided above, people will be able to see for themselves the opportunities and risks before making an investment decision in their CRV.
GTA will always continue to monitor and update information about the project, CRV token for everyone.