Curve
Curve is a decentralized exchange specialized in trading of highly correlated assets like stablecoins. It allows anyone to trade assets and provide liquidity to earn trading fees.
- Documentation
- Auditors
- Please see our FAQ on experienced auditors
- Website
- Token: CRV
- Tags: Market Making
- TVL: $2B (Rank #14)
- TVL Ranking by Market Making: #0
- Blockchain: Ethereum, Arbitrum, Polygon, xDai, Optimism, Avalanche, Fraxtal, Fraxtal, Kava, Base, Fantom, Celo, Moonbeam, Aurora, Harmony
- Chain TVL
- Ethereum: $1.82B
- Arbitrum: $91.1M
- Polygon: $22.68M
- xDai: $10.65M
- Optimism: $5.61M
- Others: $19.14M
- Code reviewed by several experienced auditors including Quantstamp and Trail of Bits
- Public team promotes accountability
- No documented protocol hacks since launch
- Core protocol launched in 2020; maturity over one year minimizes technical risk as smart contracts are well battle-tested
- Top 1% by total value locked reduces risk
- Core contracts require on-chain voting for parameter updates
- Low voting power concentration reduces risk
- No death spiral concerns
- This protocol is susceptible to risks related to decentralized exchanges (DEXs), such as impermanent loss
- Curve`s automated market maker (AMM) technology is specialized to facilitate trades between highly correlated assets like two stablecoins. This minimizes price impact when trading. It is currently the main venue for trading stablecoins
How Curve works
Curve launched with the goal of being an efficient fiat savings account for liquidity providers. To achieve this, the team at Curve designed the stableswap AMM algorithm which is a combination of the constant product (popularized by Uniswap) and constant sum formula. Trading occurs on a constant sum curve when the pool is relatively balanced and switches to a constant product curve when imbalanced. This allows for lower slippage and impermanent loss but is only applicable to similarly priced assets like stablecoins. The protocol charges a fee on every trade within a pool.
How Curve makes money
Curve makes money through protocol fees that are currently set at 0.04% for each swap with 50% going to liquidity providers and 50% to eligible CRV token holders (veCRV). The fees as well as pool parameters are decided by the Curve DAO or CRV holders.
How you make money on Curve
You earn swap fees for providing liquidity on Curve. Each pool also provides incentives in the form of native protocol tokens and the CRV token, which represents voting power in the Curve DAO. You can also stake CRV (veCRV) to earn a portion of trading fees.
