28.04.2023
The source of the development of the eco-platform of decentralized finance (DeFi) is decentralized exchanges (DEX). These exchanges allow you to exchange cryptocurrency without any intermediary. With the help of DEX, you can receive passive earnings from your exchange operations. These exchanges allow you to exchange cryptocurrency without any intermediary. With the help of DEX, you can receive passive earnings from your exchange operations. As for Curve Finance, it is one of the largest decentralized exchanges based on Ethereum, they use the latest incentive structure, which is based on the Curve DAO token (CRV). In turn, Curve is a fulcrum for decentralized finance and, most likely, will continue to develop, since more and more users trust Ethereum every year.
Will the Curve DAO token itself be a good asset to invest in? Let's talk in this article.
What is the Curve DAO Token?
The Curve DAO token is an ERC-20 token on Ethereum and a management token of the Curve Finance platform. Everyone who has Curve tokens can take part in voting for both major and minor changes in the protocol. All you will need to do is lock your CRV in Curve Locker, and you will receive votes in proportion to how much you bet and how long ago.
The Curve Finance application has 2 main use cases for its users: staking, as well as cryptocurrency exchange. It offers about 42 different base pools with tokens such as USDT, DAI, USDC, ETH, LINK and others.
In addition, you can create what Curve calls a "factory pool" with several stable coins tied to the same asset (for example, the US dollar, Ethereum, etc.). Users can either place their cryptocurrencies in these pools to earn Curve tokens, or exchange tokens. The platform has one of the lowest commissions on Ethereum and the smallest price fluctuations between stablecoins.
Who is the founder of Curve?
The Curve project begins its history in 2020. The Russian scientist Mikhail Egorov is behind the foundation of the project. Mikhail is not new to cryptocurrency. He started his activity in this field in 2015, when he became one of the founders and technical director of NuCypher, whose main activity is the creation of infrastructure and protocols to ensure confidentiality. In addition, he is the founder of the network of decentralized banks and LoanCoin loans.
How does Curve DAO work?
Curve DAO Token provides support on the Curve Finance platform, acting as a decentralized exchange and automated market maker (AMM). AMMS provide an opportunity to apply a different trading model, for which assets can be exchanged automatically and without any approvals. Instead of relying on order books, trading is conducted with the use of a liquidity pool in automatic mode.
Liquidity providers are interested in creating pools and depositing tokens. Each pool contains certain pairs of tokens that are supported in this liquidity pool. Pools contain similar assets to minimize irreparable losses and increase the chances of a return.
The exchange market is based on liquidity pools, and the protocol connects users with all sorts of exchange markets in order to find the best commission rates. Curve Finance creates low slippage and enables traders to increase their earnings. As soon as a network user makes a transaction on the Curve network, liquidity providers will earn a reward in the form of a particle of trading commission for their participation.
Tokenomics of the Curve DAO Token (CRV)
CRV does not use ICO, and the only indicator for its evaluation is a reduction in rates. Rate reduction or mining are two methods of mining CRV tokens. The user previously mined more than 80,000 CRV tokens using the code found on the Curve DAO token Github, after a comprehensive analysis of the code, CRV DAO offered to accept the launch of the token.
At the moment, the total CRV offer is 3,303,030,299 tokens, but there are 721,889,100 CRV in circulation. Almost 5% of tokens help in issuing addresses to ensure the liquidity of a decentralized exchange. In addition, the project's DAO reserves receive about 5% of tokens. In addition, the next 3% of the offer is reserved for DEX Curve employees. Subsequently, 30% of token deliveries were reserved for employees in the Curve DeFi protocol.
In addition, you should note that 62% of the remaining tokens are reserved for future CRV together with existing liquidity providers. Curve DAO CRV will follow an annual reduction of 2.25% in its distribution schedule, ensuring the daily distribution of almost 766,000 CRV tokens. Surprisingly, the process of issuing the remaining CRV tokens at the existing exchange rate may stretch over the next decades.
CRV is currently trading at the rate of $1.07, the market capitalization is $775,781,610, and the trading volume for the last 24 hours is $151,907,554.
Advantages and disadvantages of CRV
Advantages:
- Rewards — Curve Finance counts tokens to users providing liquidity to the platform. Here Curve uses a sensor that determines liquidity. Each pool has this sensor, it measures the investments of DAO users, and then rewards them, according to the indicators.
- Management — each token holder can block them to get the right to vote, this period can be from 1 week to 4 years.
- Multichain — Curve is a platform with a large number of chains, initially based on Ethereum. And this is not a single chain of service. The platform wants to add other crypto chains in the future to increase its capabilities.
Disadvantages:
- The interface may not be a disadvantage for someone, but the comfort of using a particular platform is really important for many users. Not everyone sees Curve's interface and design as convenient and modern.
- Multiprotocol — using more than one protocol increases the risks for the platform.
How to Buy Curve DAO Token?
Curve is a popular altcoin listed on many leading cryptocurrency exchanges, so it's pretty easy to buy. Some of the best trading platforms offering to buy/sell Curve are Coinbase, FTX, Gemini, KuCoin, OKX, Huobi, Gate.io, Bitget, etc. You can also purchase a token on various crypto exchanges, including on the Buycoin.online website.
The Best Hardware Wallet for Curve
It is necessary to store the CRV cryptocurrency on reliable crypto wallets. In this case, the most popular is Ledger.
Ledger has been the most popular hardware wallet brand for many years for a good reason. It offers 2 fantastic wallet models: Ledger Nano S and Ledger Nano X. Nano S is a simpler model, ideal for those looking for an inexpensive and incredibly secure wallet. Nano X uses a large screen and Bluetooth function for convenient use on the go.
Both models have the same certified secure chip that randomly generates, encrypts and stores your wallet's private key. No one can access your wallet without this key, and it never leaves the device. Ledger wallets support more than 1000 different cryptocurrencies on several blockchains, such as Ethereum, Bitcoin, Dogecoin, Ripple and all ERC-20 (including Curve).
Curve development prospects
CRV can be a great investment, especially if you think a low market cap to TVL ratio is important. However, Curve is still an unstable altcoin, and most likely its price will fluctuate dramatically. Most likely, it will follow Ethereum and Bitcoin to some extent, so keep an eye on where they will move in the future.
If you think that DeFi in general will thrive on Ethereum in the future, Curve is likely to be a strong asset to invest in.
