Curve Finance is another innovative project to come from the DeFi movement and one that provides a particularly unique and well-designed concept. Improving on functionalities that Uniswap and Sushiswap have otherwise neglected, Curve Finance provides a viable alternative solution to traditional financial platforms in the blockchain industry.
The Curve Finance platform, launched in January 2020, later released a decentralized autonomous organization (DAO) alongside the CRV token eight months later. CRV functions as the in-house token to the platform.
The platform, formally known as Curve Finance, provides traders with a decentralized exchange on which to swap digital assets. The platform aims to reduce price slippages between two tradable coins by focusing on stablecoins or assets of similar value. Through an automated market maker (AMM), the decentralized exchange is able to manage liquidity.
While the platform can be compared to Uniswap, in reality, it has some key differences and a much higher amount of locked liquidity. It also caters to stablecoins or other coins of that nature.
Curve was created by a Russian scientist with ample experience in the crypto industry. Michael Egorov both founded the platform and acts as its CEO. He previously co-founded a crypto business focused on building privacy-orientated protocols and infrastructure, NuCypher, in 2015, as well as LoanCoin, a decentralized bank and loans network.
As of August 2020, Egorov holds 71% of the governance tokens after locking up a large amount of CRV in response to yearn. Finance’s increasing voting power in the network. In a statement made later, Egorov admitted to “overreacting”.
Launched prior to Uniswap V2, Curve Finance operates in a similar way to the DeFi platform however has implemented some key differences. The decentralized exchange differentiates itself from the original AMM platform by innovating the liquidity pool trading structure. On Uniswap, liquidity pools are based strictly on predetermined trading pairs while on Curve the liquidity pools comprise multiple assets. On Curve, entire liquidity pools can also be used as an asset inside another pool.
So, how does Curve work? Once a trader adds liquidity to a specific pool, through stablecoins or other digital assets, the user will receive a token specific to that pool. 3pool is an example of one of the most popular liquidity pools on the platform.
While the platform is known to provide trading for stablecoins, it also supports mirrored assets such as renBTC and wBTC. These assets are both built on the Ethereum blockchain and track the price of Bitcoin in a typical derivatives fashion. Since the prices are close in value they can function in the same pool and be traded using the Curve DEX.
CRV is the active token to the Curve platform, providing users with governance rights, an incentive structure for fee payments, as well as providing long term rewards to liquidity providers. CRV is awarded to users based on their liquidity commitment and length of ownership.
The token was launched alongside the Curve DAO in August 2020. The maximum supply is 3.03 billion CRV, with 62% of that being distributed to liquidity providers. The rest is allocated between employees (3%), shareholders (30%) and a small percentage kept for community reserves (5%). Employee and shareholder allocations work off of a two-year vesting schedule.
Currently, over 410 million CRV tokens are in circulation, roughly 13% of the total supply.
If you’d like to incorporate CRV in your crypto portfolio, you can do so easily through the Tap mobile app. Providing a highly secure and equally simple crypto exchange, users can buy CRV with British Pounds or Euros, or exchange it for other cryptocurrencies supported on the platform such as Bitcoin or Ethereum.
Simply download the app, create an account and follow the steps to get verified through the KYC process. You will then have access to several wallets, and a much simpler crypto trading experience.