CRV Getting Started Guide

Introduction to CRV

Curve is one of an emerging class of decentralized finance (DeFi) protocols built on Ethereum that does not use a central order book but instead uses pools of user-supplied cryptocurrencies for transactions, which users can earn on their deposits. income.

The Curve white paper was published in November 2019 and its author is Michael Egorov, co-founder of a company called NuCypher. “Talking about Curve, this is an exchange designed specifically for stablecoins and bitcoin tokens on ethereum,” he explained in an interview.

Since its launch in January 2020, Curve has quickly become a leading player in the Ethereum DeFi ecosystem. Curve (CRV) allows users to trade between DAI and USDC with a low-latency, low-fee algorithm designed specifically for stablecoins. Like Uniswap or Balancer, Curve allows cryptocurrency users to buy and sell assets at potentially better prices to earn yield.

According to DeFiPulse data, as of February 4, 2021, Curve's locked value on its platform has exceeded 3.53 billion US dollars, second only to Maker, Aave, Compound, and Uniswap.

How CRV works

What makes it stand out from many similar platforms? The answer lies in how it works.

Unlike traditional decentralized exchanges, which require orders to be matched with sell orders and buy orders, Curve uses an automated market maker (AMM) protocol to enhance the liquidity of its markets.

By implementing an automated market maker algorithm, Curve can allow orders on its platform to be matched more quickly. Egorov said in the interview: "The key to Curve is its market-making algorithm. For the same total locked value, it can provide 100-1000 times higher market depth than Uniswap or Balancer. This dynamic is important for traders and liquidity providers. Both help because their base yield is higher than Uniswap's yield and the same as market depth.

This means that traders, and even larger "power users," can easily swap their cryptocurrency for another with low fees and minimal price fluctuations.

Why is CRV valuable?

In 2020, the Curve platform issued its token CRV, generating approximately 3 billion CRV tokens. The specific distribution is as follows:

About 60% of CRV tokens are allocated to users who have locked tokens on the platform, while 30% is reserved for the Curve team and investors, and the rest is reserved for the project’s employees and as a reserve for community activities.

Curve’s remaining 1.73 billion tokens will be distributed at a rate of 2¼ per year, meaning that the entire supply will be fully redistributed over 300 years. Now, 2 million CRV (or 0.067% of the total supply) will be distributed every day until 62% is reached.

CRV is a multi-purpose governance token on the Curve platform with time-weighted voting and value accumulation mechanisms. CRV holders can lock their CRV into Curve DAO to earn veCRV (Voting Escrowed CRV) tokens required for voting. The longer the lock-up period, the greater the voting power, and the lock-up period can be as short as one week and as long as four years.

Future trend of CRV

Since January of this year, the Curve project has cooperated with YFI, SNX and other agreements, and CRV has a strong trend. After Binance, CRV will be listed on KuCoin on January 27, 2021. Data from Gate.io shows that CRV is currently in high demand, with an average annualized rate of return of 20% in 10 days.

Whether CRV can continue its rising trend, we can only wait and see.