Alpha Alert - Curve Finance (CRV)
$CRV
CRV: Safer, cheaper, more efficient DEXs
Curve Finance (CRV) is a decentralized exchange optimized for low slippage swaps between stablecoins or similar assets that peg to the same value (e.g. wBTC/renBTC). The protocol employs a Automated Market Maker (AMM) that was built specifically to give DeFi users low slippage and liquidity providers steady fee revenue.
Slippage occurs when the asset prices change from the time you submit your order to the time the order executes on-chain. And depending on the depth of the liquidity pool and market volatility, slippage can severely eat away at profits when exchanging assets. Curve’s algorithm minimizes slippage and trading fees. But this is only possible when trading tokens pegged to the same asset. That’s why Curve isn’t currently a competitor to Uniswap.
Curve Finance began with the publication of Michael Egorov’s StableSwap Whitepaper in November 2019. The StableSwap whitepaper details the foundations of what eventually became Curve Finance protocol, which launched two months later in January 2020.
CRV increases liquidity through a Yield Farming incentive:
Yield Farming: CRV allows users to earn income by depositing their assets to liquidity pools is the protocol's native asset. The CRV token can be bought as well as earned through yield farming — when you deposit assets into a liquidity pool and earn tokens as a reward. By providing DAI1 to a designated Curve liquidity pool, you earn the CRV token on top of fees and interest. Yield farming the CRV token increases the incentives to become a Curve liquidity provider, as you not only gain a financial asset but also ownership of a strong DeFi protocol.
