Hope you’re ready for a curveball — Community-Enabled Analytics on Curve protocol are coming to Flipside Crypto. That means labeled, on-chain data, bounties, and more, all focused on the popular protocol.
Before our bounties and other goodies arrive, however, we want to make sure you’re armed with all you need to know about the AMM and decentralized exchange. So, with that in mind, it’s time to take a deep dive into Curve protocol, including what it is, how it works, its native currency, and more.
Let’s take a closer look.
What is Curve? ↩️
As we mentioned above, Curve is an automated market maker and decentralized exchange on the Ethereum network. It first made its debut in early 2020, and quickly garnered attention for its high total volumes and deposits.
Curve is a non-custodial exchange that enables users to swap between various stablecoins — hence its reputation as a “Uniswap for stablecoins.” It’s known for low fees and low slippage, designed to make it easier for users to execute trades.
Curve sets itself apart from other exchanges by using liquidity pools to execute these trades, rather than matching buyers and sellers directly. Liquidity providers are rewarded for providing liquidity to these pools, often with rather high APRs. However, these APRs, while higher than rates provided by other DeFi pools, can be quite volatile, leading to lower-than-expected returns.
LPs also get rewarded for their deposits in various other ways. They can receive deposit bonuses, for example, if they deposit coins with low balances into specific pools, for example, or participate in incentivized pools. These feature additional rewards for LPs on top of the usual trading and lending fees.
What is CRV? 🪙
The CVR token, also known simply as CRV, is the native currency for the Curve protocol. It’s also the governance token for the CurveDAO.
It’s primarily used to reward the liquidity providers that help make the protocol’s low-fee swaps possible. As of November of last year, each trade on the platform features a .04% fee that is used to fund those rewards. That rate declines annually, however. Deposits and withdrawals, meanwhile, incur fees of between 0% and.02% depending on their previous balance.
Want to learn more about Curve? Check out this audio interview with @drakedanner to lern more about Curve, V2, CRV, composability and more!