Since the first launch in January 2020, Curve Finance has been growing to be the lead DeFi player in terms of Total Value Locked (TVL) which is now about $19B and dominating 9.5% of the crypto TVL.
Turning a new leaf with the Curve-war token model, Curve Finance had a strong comeback in crypto. To clarify, the article will provide all the detailed information about Curve Finance, including:
- What is Curve and CRV Token? How does it work?
- How to swap, buy & store Curve tokens?
- Curve roadmap and updates, team, investors, and partners. Is Curve a good investment?
Now let’s dive in!
What is Curve Finance?
Curve Finance is a Decentralized Exchange (DEX) built on the Ethereum blockchain specially designed for swapping stablecoins such as USDT, USDC, and DAI, etc. Curve uses an Automated Market Maker (AMM) to swap with low slippage instead of using an Order Book. AMM benefits users when the swapping price remains in a relatively stable range.
Besides swapping stablecoins in Liquidity Pools integrated Ethereum Smart Contracts, Curve also allows swapping a handful of tokenized coins, namely WBTC, reBTC, or pBTC, etc. As a result, anyone can provide their tokens to multiple Liquidity Pools to earn rewards.
After the token launch in Q3 2020, the CRV price was drastically "dumped" as the result of bad tokenomics with an extremely high token emission. At that time, CRV had no use cases, causing the team to update the tokenomics to equip CRV with more utilities.
Curve Finance introduced the veCRV token model and the permissionless Factory Pool.
- veCRV: Users lock CRV to earn veCRV, incentivized to join the governance system and liquidity providing while receiving CRV token rewards.
- Permissionless Pool: Users or teams can create liquidity pools connecting to their projects while inheriting the liquidity on Curve Fiance. Each pool will have a portion of the CRV tokens which are from the protocol fees, emission, etc. This is where veCRV comes to play. veCRV in the governance mechanism will determine the amount of distributed CRV to each pool.
⇒ The process of striving to earn the largest CRV cake is called "Curve War". Numerous other projects across the crypto land have applied this model, giving particularly impressive outcomes.
How does Curve Finance work?
The token price in Liquidity Pools is calculated based on the AMM algorithm instead of an Order Book. The Curve AMM uses a constant product (x*y=const) algorithm like Uniswap and Sushi for stablecoin Liquidity Pools. Therefore, when swapping tokens, slippage is minimalized significantly by the AMM without any third-party.
In short, like Uniswap, Liquidity Providers deposit their tokens into Curve Liquidity Pools and Traders do the token swapping transactions to determine the price of tokens. Moreover, the key factor is to use Smart Contract to make AMM efficiently rebalance the token price in a stable range.
Additionally, Curve along with Compound have created a Lending Pool where Lenders deposit their crypto to earn interest from lending as well as trading fees. However, the higher the interest, the more risks Lenders have.
Curve has an incredible workflow for Liquidity Pools with Base and Metapool features so that users have a seamless experience when swapping tokens. It means that deposited tokens are automatically optimized according to the requirements of Liquidity Pools.
What is CRV Token?
Released in August 2020, the CRV token is the utility and governance ERC-20 token of CurveDAO which is a Decentralized Autonomous Organization (DAO) running the Curve protocol. CRV bearing users have the right to vote in the governance of the protocol regarding the voting weight proportional to locktime. When providing tokens in Liquidity Pools, Liquidity Providers can earn CRV tokens with the distributing rate decreasing by years.
Detailed information about CRV Token
CRV Key Metrics
- Token Name: Curve Finance.
- Ticker: CRV.
- Blockchain: Ethereum.
- Token Standard: ERC-20.
- Contract: 0xD533a949740bb3306d119CC777fa900bA034cd52.
- Token Type: Utility & Governance.
- Max Supply: 3,303,030,299 CRV.
- Circulating Supply: 434,489,745 CRV.
CRV Token Allocation
The total supply of 3.03B CRV tokens is distributed as follows:
- Liquidity Provider: 62% - 2,047,878,785 CRV.
- Shareholders: 30% - 990,909,090 CRV.
- Employees: 5% - 165,151,515 CRV.
- Community Reserve: 3% - 99,090,909 CRV
CRV Token Sale
At the moment, there’s no token sale of CRV. However, Liquidity Providers receive CRV tokens for depositing their tokens in Liquidity Pools on the Curve platform.
CRV Token Release Schedule
CRV Token Use Case
As mentioned, the Curve DAO token (CRV) is a utility and governance token that incentivizes Liquidity Providers on the Curve platform. For now, CRV is being used mostly in four main ways: Liquidity Providing, Voting, Staking, and Boosting.
Apart from Liquidity Providing, the requirement of the other three is that users have to use veCRV tokens acquired by locking CRV on the Curve platform. In simple terms, Vote-escrowed CRV (veCRV) is the token you receive when locking CRV. And the longer you lock CRV, the more veCRV you get.
- Liquidity Providing: CRV tokens are now available on major DEXs such as Uniswap, Sushiswap, etc.
- Staking: Users can receive trading fees by staking (locking) their CRV tokens. That means 50% of trading fees is distributed to veCRV holders.
- Boosting: Boosting is the key feature of Curve Finance where CRV rewards can be increased by up to 2.5x when users provide liquidity and stake.
- Voting: Holders of veCRV can participate in voting on several proposals as well as changes in pool parameters.
How to get CRV Token
You can get CRV by buying token on CEXs/DEXs:
- CEXs: Binance, Huobi, FTX, Coinbase, etc.
- DEXs: Uniswap, Sushiswap, etc.
How to buy CRV tokens
You can use Coin98 Exchange to swap other tokens for CRV following these simple steps: exchange.coin98.com
Step 1: Connect Coin98 Extension Wallet.
Step 2: Select Uniswap.
Step 3: Choose coins/tokens for trading:
- Search CRV.
- If the result does not come up, you can paste the contract of CRV into the search box: 0xD533a949740bb3306d119CC777fa900bA034cd52;
Step 4: Adjust the amount you want to swap.
Step 5: Adjust the gas fee, then click Approve.
How to store CRV Tokens
You can receive and store CRV tokens on Coin98 Wallet with these following steps:
Step 1: At the main screen of Coin98 Wallet, click Receive.
Step 2: Search for CRV token.
Step 3: Choose the blockchain (Ethereum, Polygon, Fantom) depending on your sending wallet.
Step 4: Copy your CRV wallet address or use the QR code and send CRV tokens to this address.
Roadmap & Updates
At the moment, Curve Finance has made a huge progress in developing a fully functional AMM DEX that provides various financial services for crypto enthusiasts.
Metapool Factory is the next product from Curve Finance that enables others to create multiple pools permissionlessly. Moreover, Curve Finance has had a V2 update to automatically concentrate liquidity around the price to decrease the slippage like Uniswap’s V3. Curve V2 also offers the swapping service between unpegged crypto assets such as ETH and BTC.
Team, Investors, and Partners
It’s hard to find information about the Curve team, but they constantly commit code on Curve Finance Github. In particular, Michael Egorov is the CEO of Curve Finance. He and many other teammates have contributed many lines of code on Github to build the Curve platform. Moreover, Andre Conje is a popular developer in the world of DeFi. He founded Yearn Finance and started many DeFi projects in the Fantom Ecosystem.
Being invested in by two VCs: Codex Venture Partners, and TrueWay Capital, Curve has been doing a great performance in 2021. The investors own 5% of the total supply of CRV in the token allocation. It will be distributed in 4 years, which means the investors will go along with the project for the long term.
To become a giant in TVL, Curve Finance has formed numerous partnerships with large projects such as Fantom and Polygon. In addition, Curve is also an aggregator that receives liquidity from other DEXs (1inch, Zapper, Paraswap, etc.)
Having profound partnerships with many other big DeFi projects helps Curve Finance last on a long journey. As a part of DeFi legos, Curve and other projects are joining hands into building a financial ecosystem so that they can fulfill their ambitions.
Is Curve (CRV) a good investment?
In the 2021 bull market, the CRV token has performed an incredible growth in the token price. However, the CRV token had a huge correction when the market was bearish. Since the launch of Curve V2, there are several points that you should take into account before making any investment decision:
- For swapping stablecoins, Curve Finance is the best option now with billions of dollars in Liquidity Pools. That is an attractive point that Curve Fiance is capable of managing that huge amount of funds.
- Trading fees: Like many other DEXs, Liquidity Providers receive rewards when depositing their tokens in Liquidity Pools.
- Boosted Pools: A feature of Curve Finance to gain more liquidity so as to increase the yields for LPs. Everything has a reason, and Boosted Pools are acting as liquidity vacuums.
- Despite being audited by Trail of Bits three times, the Curve project is not completely safe, especially when implementing Smart Contacts. Surprisingly, no exploits or hacks occur on Curve Finance.
- It will be challenging for Curve Finance to maintain the top position in crypto while there are other DeFi protocols paving the way to the top. The TVL on Curve Finance is stably growing, as evidenced by the growth in the un-bullish market. This is a very good signal that users are still being satisfied with the rewards and they remain their "lazy" deposited crypto assets.
- Curve Finance is now available on Ethereum, Polygon, and Fantom. There’s an announcement that they are boarding on Polkadot. Imagine if Curve Finance can be available on four big blockchain platforms, it would possibly lead the market?
At the moment, Curve Finance is already a huge project and it has a profound position in the DeFi space. There is always more room for Curve Finance to expand simply because we are just at the beginning of DeFi. And as usual, Do Your Own Research and be responsible for your every investment.
Besides Curve Finance, there are several other AMM DEXs in the crypto market. However, it’s hard for others to catch up with Curve Finance.
- Ethereum: mStable is an AMM protocol that combines lending and swapping specifically for stablecoins.
- Binance Smart Chain: Nerve Finance is an AMM platform built on BSC that minimizes the price slippage as much as possible.
- Solana: Saber is an AMM DEX specially designed for stablecoins that is built in the Solana Ecosystem, released in June 2021.
Overall, Curve Finance is a DeFi giant running on Ethereum, dominating the market in terms of TVL. By using an AMM, Curve enables swapping stablecoins with low slippage which could benefit daily traders. As a result, Curve Finance owns a very high standard for optimizing liquidity.
As time goes on, CRV tokens are gradually distributed as rewards and incentives to attract uses from other DeFi competitors. In the long race, Curve Finance has a huge potential in the DeFi storm.
And that is all you need to know about Curve Finance and its CRV token. Hope you’ve acquired the necessary information to understand the potential behind Curve Finance better.