Many new projects in blockchain technology come out, one of which will be the focus of this article is about Curve Finance, this is one of the popular Defi projects.
Indeed, the launch of this project is relatively new, the Defi project which runs on the Ethereum blockchain only appeared in January 2020. It’s only been over a year in the middle of 2021, but he’s ranked 3rd in Defipulse at press time.
This is a project in the Dexes or Decentralized exchange category, with a value of $7.24 billion locked, slightly below the Compound lending category which reached $2.27 billion locked at pres time.
- 1 What is Curve Finance?
- 2 Curve Finance Polygon
- 3 How does Curve Finance work?
- 4 Who is the founder of Curve finance?
- 5 How to use curve finance?
- 6 Where to buy Curve finance?
- 7 Curve finance crypto price
- 8 Is Curve Finance safe?
- 9 Is Curve FInance a good investment?
- 10 Conclusion
What is Curve Finance?
Curve Finance, is an automated market maker on a decentralized exchange or Dex, which uses a pricing algorithm, and not based on an order book. Curve finance is designed to exchange stablecoins with low fees and no slippage.
Acts as a liquidity aggregator allow anyone to add assets in the liquidity pool and earn rewards from validated transactions.
The Dex Curve finance platform runs on the Ethereum blockchain and users include smart contracts such as 1inch, Paraswap, Totle, and Dex.ag, allows them to trade between DAI and USDC and/or other currently supported stablecoins. Maybe you are familiar with Uniswap, this is a similar project, but uses a slightly different algorithm.
As with traditional exchanges, you can swap cryptocurrencies with one available in the liquidity pool. It uses a specially designed algorithm which is how the price formula in Curve works, this platform can be very useful for exchanging tokens that are always in relatively the same price range.
About liquidity pool
A liquidity pool is illustrated as a smart contract seat that manages using an algorithm to complete an order.
The liquidity pool requires tokens that traders use to exchange tokens with one another. Here’s an example, taken from the Curve.fi resource. In the pool, there are 1000 USDC and 1000 DAI.
There are users who exchange 100 USDC for 100 DAI. The transaction process causes USDC tokens to be 1100 and DAI tokens remaining 900. This condition causes the value of DAI tokens to be slightly lower than USDC tokens. This is what liquidity token providers can use to earn rewards.
Understanding Curve’s liquidity pool algorithm is quite confusing, but the example above is at least an illustration of how Curve.fi’s smart contracts work.
You may find it much easier to understand through the Curve Finance whitepaper, where there is a detailed explanation of the unique Curve.fi smart contract formula.
The CRV token is Curve Finance’s native token that provides support in a decentralized exchange within the Curve ecosystem.
Even though CRV is relatively new, at the time of writing its market capitalization is over $800 million, the maximum supply of CRV tokens is 3,303,030,299, and currently, 11%(357,721,214.21 CRV) is circulating on the market, the total supply of 1,520,717,996.
In the Curve finance environment, CRV tokens are used for voting, staking, and boosting. So if anyone wants to participate in one of the three we have to lock the CRV to get the veCRV.
veCRV is a token that is locked for a certain period of time, the longer the CRV lock duration the higher the reward will be received. veCRV itself actually stands for voting-escrowed CRV.
How to Earn Profit from Liquidity?
In Curve’s decentralized exchange, being a liquidity provider is quite profitable with low risk. Users can store assets and utilize them to earn rewards. How to start participating as a liquidity provider requires a few easy steps.
- Visit the Curve.Fi site then connects the wallet.
- Select a pool. You need one or more stablecoins or Bitcoins wrapped up to contribute to the liquidity pool.
- Enter the amount to be deposited then click Deposit and Bet.
- After that, the selected pool tokens will be stored and consequently start earning fees. The staked shares appear at the bottom of the page, while your balance will appear on the Profits page.
- Then the pool will provide you with Curve LP (liquidity provider) tokens, which can be exchanged back to the initial deposit plus a fee.
- If you want to withdraw tokens and prizes, open the withdrawal wallet and click the “Claim” button to withdraw.
Curve Finance Polygon
Curve finance Dex has been integrated with Polygon which has a native token MATIC, to interact with Polygon through the Curve polygon site address.
You can also access the Polygon curve from the top-right menu in the Network dropdown menu.
First, you are faced with a classic but quite intuitive web page. Where the user can directly choose to swap between the available stablecoins in the selection box.
However, it requires a connect wallet to be able to use all Curve Polygon services. The most widely used is the Metamask wallet.
If you want to start yield farming using Curve polygons, the first step is to select the available pool in the bottom box in the Curve pool option.
Currently only supports Aave pools in Curve Polygon which contain USDT, aUSDC, and aDAI, and Atricrypto Crypto V2 which contains DAI, USDC, USDT, wBTC and WETH.
For example, if you select Aave pool and click on the link, you will be faced with the options below showing the pool status in the bottom box.
The next step is to deposit, just click deposit in the menu on the top page, you will be faced with a stablecoin option that will automatically detect the coins available in your wallet.
To deposit, enter a number of stablecoins to be transferred, after which there are two options on the button. Your “Deposit” option will receive the selected number of stablecoins but will not receive the MATIC reward. The second option “Deposit and stake in Gauge” allows you to receive MATIC rewards.
Steps to withdraw staking are also easy by clicking the withdraw button. Next, fill in the amount you want to withdraw, then click the withdraw button, or withdraw and claim.
How does Curve Finance work?
Curve finance in the use of AMM (Automatic market maker) allows owners of digital assets to be traded automatically in a permissionless manner. It occurs in a liquidity pool, using mathematical calculations to determine prices. This is different from traditional exchanges where there are buyers and sellers.
Simply put, the liquidity pool is filled with tokens by the users who supply the tokens. The token then uses a mathematical formula to determine the price. The formula can be tampered with for different purposes. Anyone who owns ERC-20 tokens can become a liquidity provider and earn.
Who is the founder of Curve finance?
There is not much information about the Curve Finance team, it is only known that the founder of Curve is Michael Egorov. He launched Curve finance in January 2020. He is also known as the co-founder and CTO of NuChyper, an encryption company from Y Combinator.
Besides that, he is also experienced on LinkedIn in tool infrastructure. He is also known as a scientist and physicist and even got a bronze medal at the International Physics Olympiad in 2003.
Although he launched Curve in January 2020, in the middle of the year he experienced quite rapid growth. In August 2020, he launched a decentralized autonomous organization (DAO), with the CRV token as a crypto coin used in the Curve Finance ecosystem.
How to use curve finance?
How to use Curve Finance the user must first connect the crypto wallet with Curve. There are several wallet options that support the Curve environment, such as Metamask, Ledger, Authereum, WalletLink, Torus, Lattice, Trezor, Fortmatic, WalletConnect, Portis, and Opera.
You can choose one of the wallets according to the wallet you have. It will take a few steps to connect the wallet with Curve.
If you want to buy and sell stablecoins, the user clicks on the Buy and Sell menu above the metric column at the top of the page. After the form box appears, the user selects the token to be traded. There is a choice of USDC, USDT, and DAI.
If there are no funds available in the wallet, a notification appears not enough balance, swap is not available.
How to starting Deposit/swap
At the time of writing this feature is still in beta, for security reasons it is better to use a small amount, because there may still be bugs that cause the smart contract algorithm calculation to fail.
- First, visit https://curve.fi/sbtc/ for a deposit or reBTC pool https://www.curve.fi/ren/ for swapping.
- If you have previously connected a wallet, it takes a few steps and time to connect to Curve.
- Fill in the amount you want to deposit in the selected currency (sBTC, wBTC, renBTC).
- Click the deposit button or select deposit and stake in gauge.
Maybe you should pay attention to the amount that will be received with some costs in the transaction. Check the Ethereum address shown and click deposit or stake for deposit and Sell button to swapping.
To wait for the transaction to complete may take an hour as it requires six confirmations.
After getting six confirmations then need to confirm the transaction and receive tokenized at the wallet address used.
After the process is complete, you will see the number of wBTC or sBTC selected when making a deposit or swapping.
Where to buy Curve finance?
To buy Curve Finance CRV tokens is through a broker or exchange that provides CRV tokens. It requires a registration step to be eligible to buy CRV using their platform.
Most brokers and exchanges require users to verify accounts for KYC and ALM purposes. Follow the steps through the guide.
Not all exchanges provide CRV tokens, check whether the exchange has CRV traded or not. Some of the exchanges that answer the question of where to buy Curve CRV tokens include Binance, Huobi Global, OKEx, CoinTiger, and FTX.
Of these exchange options, the most popular are Binance and Huobi global. You can choose one of the exchanges you trust the most.
Curve finance crypto price
Looking at the history of the USDT CRV price, from Tradingview, it first slid to a high of $23,255 on August 10, 2020. However, the price on that day also closed lower at $5.782.
The ups and downs of the CRV price wave ranged between $6 as a resistance level and $0.1 as a support level.
At the time of writing the price of the CRV at $2.15 is up 4%. Total Value Locked (TVL) has reached $9,797,740,691 at press time. Daily volume is quite high today reaching close to $180 million.
Unlike other coins such as BTC and other altcoins, CRV prices tend to be stable, and there are no price spikes like altcoins. This may be because Curve Finance is the Dex for stablecoins whose value tends to be pegged at $1.
Is Curve Finance safe?
Maybe some beginners think that the audit proves to be a safe exchange. But it turns out that Curve Finance is also a potential risk. So it is better to only spend an amount that is ready to be risky.
Risks in trading transactions require necessary fees for liquidity providers. And also smart contracts, which are integrated with other smart contracts. It will in the risk if one smart contract damage, it can spread damage to other smart contracts.
However, since launching Curve finance, some users feel safe and haven’t faced any issues.
Is Curve FInance a good investment?
Even though Curve Dao is one of the Dex with high TVL. But if you look and analyze the history of CRV prices, it seems difficult to say that CRV is a good investment.
Since it was first launched the price of the CRV has been very high at $23. But nowadays it will be very difficult to repeat that price.
At press time the price of the CRV was only $2.15, to reach the price of $5 even requires high demand. Even though it might be achieved by the end of 2021, it is quite unlikely.
The reason that makes it difficult for CRV prices to spike is that Curve Finance is a decentralized exchange for stablecoins of relatively equal value.
Curve Finance is currently ranked 1 on Defipulse over Uniswap with a Total Value Locked of $7.28B. While Uniswap has a Total Value Locked of only $5.9B.
This means that Curve Finance is one of the Defi projects in the Dex category that is experiencing relatively fast growth.
At the time of writing in the Defi project, there were 24 projects in the Dexes category at Delfipulse. And Curve Finance became Dex in the first place, followed by Uniswap and then Sushiwap. The last one is UniTrade with TVL $77.5k.
This article was created only as a means of information and opinion, not as investment advice, all risks due to investment are the responsibility of each investor.
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