Curve Finance: The Ecosystem is Outstandingly Powerful in DeFi
Curve Finance is a well-known decentralized exchange that uses stablecoins. Curve Finance is a decentralized exchange based on stablecoins. It has improved the constant product and constant sum market maker models to provide users with low slippage and low fees. It also drives the growth and expansion of many related ecological agreements, like Convex, creating a virtuous cycle of value for the project ecology. Curve Finance also plans to issue stable coins and continuously expand the ecological territory to encourage the sustainable development of the ecology, and it still has unlimited potential in the future.Introduction to Curve FinanceFounded by Michael Egorov and launched in January 2020, Curve Finance aims to provide a decentralized exchange (DEX) built with an automated market maker (AMM) architecture, focusing on stablecoins (USDT, USDC, DAI), synthetic assets/derivatives/anchor assets (wBTC, renBTC, stETH), etc. Curve Finance is currently deploying multi-chains like Fantom, Polygon and Avalanche. The protocol Total Value Locked (TVL), which was once the largest decentralized exchange of TVL, began to grow steadily. It was once worth $24 billion. DeFiLlama data shows that after a year of turmoil, the TVL currently locked into the protocol is still at a forefront of all major DeFi protocols at $4.1 billion. The recent daily trading volume is 200,000,000 U.S. Dollars. Curve was originally designed to facilitate stable asset transactions. Curve Finance was first introduced in its white paper StableSwap, which is an efficient mechanism for Stablecoin liquidity. Its AMM strategy allowed traders to trade between stablecoin pairs quickly with less cost and slippage. In fact, Curve has developed into a simple and huge asset liquidity-as-a-service protocol driven by DAO governance. Curve Finance launched the DAO in August 2020 to help reduce liquidity costs. Curve Finance launched the native token CRV on August 13, 2020 as Curve’s governance token. The initial issuance was 1.3 billion. It also initiated the first pre-mining reward distribution activity. Tokens will be released linearly over a year. The CRV token gives token owners voting governance rights. Liquidity providers can also earn CRV tokens based on the share’s value and the time it has been in a pool. The governance token dividend mechanism was launched in September 2020. It distributes 50% of the transaction fee to liquidity providers and 5% to early LP providers. The distribution is as follows: 62% to liquidity providers, 5 % to early LP providers, unlocked linearly in 1 year
30% to shareholders, unlocked linearly in 2-4 years
As a community reserve, 5% of the combustible reserves are retained
3% to team members, unlocked linearly for 2 years
The $CRV token is able to play the following roles in the Curve ecosystem. Governance voting: Lock CRV to obtain veCRV and participate in the governance through a time-weighted vote mechanism.
Value capture mechanism: Facilitate liquidity pools using the veCRV governance vote mechanism.
Lock-in Incentives: To allow liquidity providers to gain value over time.
Fee Burn: This is used to burn transaction fees to lower inflation.
veCRV tokenCurve Finance designed the VeToken (Vote – Escrowed Tokens), model. Voting tokens veCRV can be obtained by locking CRV depending on time weighting. The longer the lock time, the higher the veCRV you will get. One CRV can be locked for four years to obtain 1 veCRV. However, locking for one year will only give you 0.25 veCRV. VeCRV cannot be transferred. Therefore, locking CRV is the only way to obtain veCRV. Repurchase the Curve 3Pool stable pool LP Token 3Crv to give back to veCRV holders. Repurchase the LP Token 3Crv from Curve 3Pool stable pools (ie DAI+USDC+USDT) to give back to veCRV owners. Boosted rewards: VeCRV holders will receive a liquidity reward up to 2.5x according to the pledge period. This increases the overall income of liquidity provision. Initially, LPs who provide liquidity to 3pool will receive 0.22% APR. If veCRV is locked they can increase the reward to 2.5 times the pledge period. Curve Finance hosts several liquidity pools. A fixed amount of $CRV tokens is available to reward liquidity pool providers. The DAO votes will determine which pool receives the highest CRV rewards. Voting power in veCRV gives individuals the ability to influence CRV income. Additionally, holding veCRV could open up opportunities for airdrops for other cooperative projects. The following image can be used to illustrate the relationship between the Curve ecosystem’s main tokens. Governance voting rights are the most important function. Stablecoin projects will suffer if their stablecoin assets fluctuate rapidly or the transaction depth is not sufficient. The business will then decline. The project party must find a way for the market to be in the most stable place and with the highest transaction depth. This will allow the transaction requirements to be met while maintaining low slippage, even under large transactions. Curve’s core liquidity pool requires that Curve’s community vote meet certain conditions. At least 2,500 veCRV must be required to initiate a request (equivalent of locking 10,000 CRV for a year), more than 30% veCRV participation, and a support rate greater than 51%. Each mining pool’s liquidity incentives will be determined by the veCRV voting rights. Each protocol must accumulate veCRV to be eligible for Curve Finance liquidity incentives. This will allow them to increase their annualized income. Despite market volatility, Curve Finance remains the leading decentralized exchange in TVL and is expanding its ecological territory. Curve Finance is expected to keep up with the wider DeFi industry in future. We encourage you to do your own research before investing.Join us to keep track of news: https://linktr.ee/coincuWebsite: coincu.comHaroldCoincu NewsContentsTags: CRVCurveCurve DAOCurve FinanceDeFiveCRV