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Difference between revisions of "Curve Finance"
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Small edits + links to whitepapers. Minor overview of protocol
(Created page with "Curve Finance is a decentralized exchange created by Michael Egorov. It is currently the largest protocol by total value locked. The original white paper for Curve Finance was written on November 10th, 2019<ref>https://curve.fi/files/stableswap-paper.pdf</ref> and published on January 3rd, 2020. Curve Finance is a DAO governed by the CRV token which launched in August 2020. Curve Finance specializes in pegged assets such as stablecoins. The protocol...") |
(Small edits + links to whitepapers. Minor overview of protocol) |
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Curve Finance is a decentralized exchange created by [[Michael Egorov]]. It is currently the largest protocol by total value locked. The original white paper for Curve Finance was written on November 10th, 2019<ref>https://curve.fi/files/stableswap-paper.pdf</ref> and published on January 3rd, 2020. Curve Finance is a DAO governed by the CRV token which launched in August 2020. | Curve Finance is a decentralized exchange created by [[Michael Egorov]]. It is currently the largest protocol by total value locked. The [https://curve.fi/files/stableswap-paper.pdf original white paper] for Curve Finance was written on November 10th, 2019<ref>https://curve.fi/files/stableswap-paper.pdf</ref> and published on January 3rd, 2020. Curve Finance is a DAO governed by the CRV token which launched in August 2020. | ||
Curve Finance specializes in pegged assets such as [[Stablecoin|stablecoins]]. The protocol is written using the [[Vyper]] programming language. | Curve Finance specializes in pegged assets such as [[Stablecoin|stablecoins]]. The protocol is written using the [[Vyper]] programming language. | ||
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=== Convex and bribing === | === Convex and bribing === | ||
In early February, [[Convex]], a yield optimizer built atop and supported by Curve Finance launched and began growing rapidly accounting for around 90% of Curve Finance TVL on Ethereum<ref>https://defillama.com/protocol/convex-finance</ref>. The introduction of a bribing mechanism and the so-called "Curve Wars" allowing protocols to buy voting power from Convex and Curve Finance users to receive emissions from both protocols is largely credited as one of the reasons behind the protocol growth.<ref>https://medium.com/momentum6/the-great-curve-war-is-heating-up-dont-miss-the-alpha-9b70d99cf694</ref> | In early February, [[Convex]], a yield optimizer built atop and supported by Curve Finance launched and began growing rapidly accounting for around 90% of Curve Finance TVL on Ethereum<ref>https://defillama.com/protocol/convex-finance</ref>. The introduction of a bribing mechanism and the so-called [["Curve Wars"]] allowing protocols to buy voting power from Convex and Curve Finance users to receive emissions from both protocols is largely credited as one of the reasons behind the protocol growth.<ref>https://medium.com/momentum6/the-great-curve-war-is-heating-up-dont-miss-the-alpha-9b70d99cf694</ref> | ||
=== Crypto Pools and multi-chain expansion === | === Crypto Pools and multi-chain expansion === | ||
In 2021, as Ethereum grew more expensive to use, Curve Finance focused on leaner pool implementation as its original lending pools became too | In 2021, as Ethereum grew more expensive to use, Curve Finance focused on leaner pool implementation as its original lending pools became too costly to use. It launched on its first sidechain in February 2021<ref>https://curve.substack.com/p/curve-launches-on-fantom-?s=r</ref> as part of its long standing relation with [[Andre Cronje]]. It later launches on Polygon in April 2021<ref>https://thedefiant.io/curve-finance-launches-on-layer-2-solution-polygon/</ref>. | ||
In June 2021, as a major departure from the pegged assets space, the protocol launched a pool with volatile assets called tricrypto. In November 2021, more crypto pools appeared on Curve<ref>https://twitter.com/curvefinance/status/1463548830461448192</ref>. | In June 2021, as a major departure from the pegged assets space, the protocol launched a pool with volatile assets called tricrypto. In November 2021, more crypto pools appeared on Curve<ref>https://twitter.com/curvefinance/status/1463548830461448192</ref>. | ||
== Overview == | |||
Curve Finance enables low-slippage swaps between stable assets using the algorithm described in its [https://curve.fi/files/stableswap-paper.pdf StableSwap whitepaper]. Curve's major use cases revolve around maintaining peg for stablecoins and wrapped assets (e.g., wrapped Bitcoin). | |||
Curve operates using pools, which group assets whose prices should be stable, and metapools, which group individual assets paired with an existing pool. Exchanges from one asset to another are routed through these pools. For example, the largest pool for stablecoins is 3pool, which holds DAI, USDC and USDT. To enable and incentivize liquidity for their asset, individual stablecoin issuers have created metapools that group their stablecoin (e.g., FRAX) with the 3pool. This allows stablecoins of varying liquidity access to the liquidity strength of three large and reputable assets. | |||
Curve v2 pools enable support for volatile assets using a different algorithm, described in its [https://curve.fi/files/crypto-pools-paper.pdf crypto pools whitepaper]. The major volatile asset pool is tricrypto2, which holds USDT, wBTC and wETH. However, since Curve has allowed creation of crypto pools for any asset, protocols have mostly created pools that pair their assets with ETH or USDC rather than following the stablecoin pattern of pairing with a metapool like tricrypto2. | |||
== Sources == | == Sources == | ||
<references /> | <references /> | ||
[[Category:Protocols]] | [[Category:Protocols]] | ||