What is Curve Finance？
Curve Finance(https://curve.fi) is an automated market maker protocol designed for trading between stablecoins with low fees and sliding spreads. It is a decentralized liquidity aggregator where anyone can add their assets to several different pools of liquid funds and earn fees.
AMM（automated market maker） Uses a pricing algorithm instead of an order book. Because of the way the pricing formula works on the Curve, it is also very useful for exchanges between tokens that remain within a relatively similar price range.
This means that it applies not only to exchanges between stablecoins but also to exchanges between different tokenized versions of the currency. Thus, Curve is one of the best ways for different tokenized versions of Bitcoin, such as WBTC, renBTC, and sBTC, to be exchanged. There are currently 17 Curve pools available to exchange across a number of different stablecoins and assets.
The difference in Curve
For example, we all know that 1 USDT should be equal to 1 USDC, which in turn should be roughly equal to 1 BUSD, and so on. However, if you want to convert $100 million of USDT into USDC, and then convert it back into BUSD, some sliding spread occurs. The formula of Curve is specifically designed to minimize such sliding spreads.
This makes the sliding spread very low for even very large amounts. Indeed, spreads on the Curve can compete vigorously with some of the best liquidity-centralized trading platforms and OTC markets.
People have different assumptions about trust and risk, so liquidity and execution aren’t the whole story. But it must be exciting to see centralized and decentralized trading platforms compete in this way.
What products does Curve finance have?
Now we know that Curve has the advantage of low fees and low sliding spreads. However, low fee, low sliding spread will lead to low fee to LP (liquidity Provider). So we have a problem, how to attract LP?
1.DeFi Portfolio – offers more ways to earn money than other DeFi protocols
>>>Through liquidity funds>>>Earn revenue in other agreements Base combination>>>The customer uses DAI swap to cDAI of Compound>>>get compound profit>>>put cDAI in Curve>>>get fees
2.Cross-asset exchange
>>>partnership with Synthetix
Example:
DAI swap sUSD>>>sUSD swap sBTC>>>sBTC swap wBTC
DAI swap sBTC>>> Confirm the transaction>>> NFC received>>>6minute settlement period>>>Don’t close your webpage>>>Synthetix after the settlement period>>>Click to “complete the transaction “>>>The Second deal>>>sBTC swap wBTC>>>After confirming the transaction>>>user receive wBTC
Synthetix the role of Bridges>>>The sUSD and sBTC exchanges are slip-free>>> sBTC and wBTC>>>use Curve low slip fee>>>The trading slippage is almost 0
3. Token
CRV on-chain data
Total supply:3.03 billion
circulating supply:34.3 billion
TVL:1.38 billion
The number of currency holders:
26000
“This is Not Financial Advice”
This article is a part of the class “751471 Economics of Decentralized Finance (DeFi)”
supervised by Asst. Prof. Napon Hongsakulvasu
Faculty of Economics, Chiang Mai University
This article was written by 631615518 Yahui Chen/631615506 Jiayi Li/631615523 Yiwen Wang