Curve

What is Curve?

An Automated Market Maker (AMM)

• Used with non custodial wallets on EVM blockchains
• Launched in January 2020:
  • First for stable coins (in house stableswap algorithm)
  • Then for like-priced (pegged) assets (stEth / Eth)
  • Finally differentially priced (non pegged) assets (in house Automatic market making with dynamic peg)
• As of November 2022, it’s among the 4 biggest DeFi protocols in terms of TVL 
• It can be considered as the bakbone of DeFi

A stable coin helper

Thanks to its first focus on stable coins, the related improvements and the liquidity it drained, Curve became a stable coin stabiliser, helping stable coins keeping their peg. It can be illustrated by the following example with DAI: indeed the launch of the 3pool (USDC/USDT/DAI) on Curve (September 2020) helped stabilizing its peg.

Impact of Curve on Dai Price:

Dai Price end of 2022:

Curve Specificities

Token

Its token, the CRV, was deployed mid August 2020.

It is distributed to Curve users according to measurements taken by gauges.

Gauges are created by pools creators.

Pools Management

In house algorithms are used to manage the different pools for:

• High liquidity
• Low fees
• Low slippage

DAO

It has an Aragon based DAO where the 1 token = 1 vote method is replaced with a voting weight proportional to locktime. The locked asset is the CRV. The resulting voting weight count is the veCRV, for vested escrow CRV.

The DAO defines how are distributed the rewards among the existing gauges. 

Usage

Curve can be complex to use. To fully benefit from the protocol one would need to:

• Provide LP
• Create gauge
• Submit gauge vote
• Lock CRV
• Vote for pools
• Claim rewards

That’s why a whitelist mechanism has been setup to authorize other protocols interacting directly with Curve smart contracts. It allows providing services on top of curve:

• Create CRV derivatives (yCRV, sdCRV, cvxCRV) 
• Increase voting power
• Simplify Curve usage
• Optimize yields

4 protocols are currently part of this whitelist and propose Curve related services:

• Yearn Finance
• Stake DAO
• Convex
• Abracadabra (May 2022)