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Learn the Curve Protocol from the ground up: DeFi the essential building blocks of the Lego world

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Curve has grown into a concise and massive DAO-governance-driven asset liquidity as a service agreement, becoming an important building block in DeFi's Lego world.

What is Curve's Path to being sniped by the Big Short -- What Defi Must Know

Original article by 0xLuo, Stefan, DeBox Research Institute

Abstract

Curve, as a decentralized trading platform based on stablecoins, is well known to users. By improving the constant product market maker model and the constant sum market maker model, Curve can provide users with stablecoin trading experience of low slip point, low cost and low volatile loss.

By designing the VeToken model, Curve attracts the war between major project parties to accumulate $veCRV and compete for the governance right of Curve, so as to have power and influence on Curve DAO and ultimately provide its users with higher returns, becoming a model of Token economics of protocol. At the same time, it has spurred the growth of Convex and other related ecological agreements, forming a virtuous value cycle of the project ecology. Curve also plans to expand its ecological map by issuing stable coins to stimulate sustainable ecological development, which still has unlimited potential in the future.

I. Introduction to Curve

Curve Finance by Michael Egorov Launched in January 2020, it aims to provide a decentralized trading platform (DEX) built with an automated Market maker (AMM) architecture, mainly focusing on stablecoins (USDT, USDC, DAI), synthetic assets/derivatives/anchored assets (wBTC, renBTC, stETH), etc. At present, in addition to Ethereum as the main business position, also in Fantom, Polygon, Avalanche, Arbitrum, Optimism and other multi-chain deployment.

Curve 于 2020 年 8 月创建了 Curve DAO，并发行了原生 Token $CRV，之后协议 TVL（Total Value Locked，总锁定价值）开始稳步上升，一度成为 TVL 最大的去中心化交易所，在今年年初最高曾超过 240 亿美元。根据 DeFiLlama 的数据，在经历了整个加密世界动荡的一年后，该协议目前锁定的 TVL 仍居各大 DeFi 协议前列，约为 41 亿美元，近期每日交易量在 2 亿美元。

DeFi protocol TVL ranking

Curve 协议 TVL 与原生 Token $CRV 市值走势

1.1 Curve automatic market making design

Curve was originally designed for stable asset trading, in its initial whitepaper StableSwap-efficient mechanism for Stablecoin liquidity Curve's AMM strategy, which allows traders to trade between stablecoin pairs quickly and with less expense and slippage, is introduced.

1.1.1 Introduction to the AMM

自动做市商（AMM）是驱动去中心化交易平台（DEX）的底层基础设施。Uniswap 以 x*y=k 开启 AMM 纪元，用最简单的数学法则实现去中心化链上交易，在没有中心化托管方的情况下即可进行 Token 互换，且人人都可以成为流动性提供商。此类自动做市方式称为恒定乘积做市商模型，简称 CPMM（Constant Product Market Maker）。

假设交易对是 A 和 B 两种 Token ，其中 x 是流动性池中 A 的总流通数量，y 是 B 的总流通数量，在不增加或减少流动性的情况下，无论交易多少次，x 和 y 的乘积 k 都是恒定常数 k。所以 A 和 B 的数量关系是这样一个反比的曲线：

Constant product market maker model

While Uniswap and the first CPMS have made great strides in AMM, there are still some drawbacks, such as slippage and impermanent losses.

1.1.2 Transient loss

无常损失（Impermanent Loss）是指持用户向 AMM 资金池添加流动性后，当价格上涨或者下跌时，AMM 将自动出售上涨 Token ，并被其他资产取代，以确保流动性池维持其预设比率。用户撤出流动性后所得的资产与单纯持有相比会出现一定的损失，这个损失叫做无常损失。

假设当前流动性池为 ETH-USDT，起初 1 $ETH = 100 $USDT，往流动性池中同时添加 10 个 $ETH 和 1000 个 $USDT 作为 LP（Liquidity Provider），那么 Token 数量乘积恒定常数 k = 10 * 1000 = 10000，LP 总价值为 2000 $USDT。

过了一段时间后，如果外部 $ETH 价格上升变成 400 $USDT，套利者将通过该流动性池不断将$ETH 兑换成 $USDT，直到流动性池的 $ETH 的价格与外部保持一致，这两种 Token 在资金池中的比率将随之改变。套利结束后，池子中现有 5 个 $ETH 和 2000 个 $USDT，此时 Token 数量乘积 5 \* 2000 = 10000 仍为常数 k，而 LP 的总价值变成了 4000 $USDT。然而，如果一开始不添加流动性，而是一直持有 10 个$ETH 和 1000 个 $USDT，此时的总价值将变成 5000 $USDT。单独持有 Token 与通过 AMM 资金池做市之间的价差即为无常损失。

1.1.3 Slip point

滑点（slippage）是指交易的预期价格与执行交易的实际价格之间的差额。鉴于加密货币的波动性，每个 Token 的价格会因为交易量和活动而产生波动。最常见的是，流动性小或突然面临大交易量的资金池更容易受到滑点的影响。滑点百分比显示特定资产的价格在整个交易中偏移了多少，同时也代表了用户对滑点的容忍度。

The Constant Sum Market Maker (CSMM) can be used to solve the slip point problem. CSMM forces the pool to have the same total amount of two assets, following the formula x+y=k, which can be represented by a straight line. The AMM formula, Price = dy/dx, is also always close to 1, which means that transactions at these points have minimal slippage. This is ideal for situations where the price change in a trade is close to zero, significantly reducing the chance of a slip point.

Constant summation market maker model

采用恒定和可以消除滑点风险，并能有效稳定价格波动。但当出现链下价格与池中的 Token 价格不匹配时，这种设计会使交易者和套利者有机会消耗掉池中储备金，破坏流动性池的稳定，使流动性池中的资产集中到了某一种资产中，即流动性枯竭。因此，恒定和做市商并不是一个常见的 AMM 模型。

1.1.4 AMM optimization of Curve

To solve the problem of large CPMM slip points and liquidity depletion of CSMMS, Curve AMM fully leverages the use of CPMS and CSMMS to create denser liquidity, thereby reducing the slip points within a given trade range. Create a relatively flat curve near the equilibrium point of the curve, similar to the constant summation function, to keep prices relatively stable, while making the ends more tilted, similar to the constant product function, so that there is liquidity at each point of the curve.

Curve AMM model compared with CPMM and CSMM model

1.2 Curve vs Uniswap

As the two most used DEX, which one is more dominant, Curve or Uniswap?

首先用 Uniswap 的总体表现来与 Curve 相比是没有意义的，因为 Uniswap 是无需许可的并且可以支持无限数量的流动性池，而 Curve 的池子需要进行投票通过。我们可以通过效率和滑点、波动性 Token 对、合成资产交易对等方面来进行对比。

1.2.1 Efficiency and slip point

Curve is more focused on stablecoin exchange, so it is cheaper to use. Thanks to Curve's mechanism and cooperation with project parties, more types of stablecoin and synthetic assets can be transferred to Curve to form a liquidity pool. For most stablecoin trading pairs, they can directly trade with each other on Curve, while two transactions may occur on Uniswap: Stablecoin 1 is converted into $ETH, $ETH is converted into Stablecoin 2. As a result, being a trader will incur double transaction fees. In addition, Curve minimizes volatile losses by limiting the pool and the types of assets in each pool and making them less susceptible to volatile asset price changes. However, there are still some cases that cannot be directly exchanged, such as usdt and yusdt

1.2.2 Stable Coin market

在 Uniswap V3 更新之前，Curve 由于更少的滑点、更高的流动深度、更少的费用、更少的无常损失，是稳定币交易市场当之无愧的龙头。Uniswap V3 提出了集中流动性，流动性提供者可以选择设定 Token 的价格范围，这也优化了 LP 的交易费用产生。因而在升级之后，Uniswap 在稳定币市场的份额不断升高。目前 Uniswap 在稳定币市场份额上已经略占优势。

Change of transaction share between Curve and Uniswap Stablecoin

1.2.3 Volatile assets

For Uniswap, Stablecoin accounted for only 14% of Uniswap V3's trading volume in the past year, despite Curve V2 It optimised the unstable coin trading experience and started a new journey in volatile asset trading, but Uniswap is the undisputed king of the major volatile currency pairs like $BTC/$ETH.

1.2.4 Synthetic assets

Curve is the clear winner of synthetic assets such as ETH/BTC including $stETH, $sETH and $renBTC, with ample liquidity for different types of "paper" markets. Curve accounts for 65% of stETH's daily trading volume (versus just 2% for Uniswap) and 84% of $renBTC's daily trading volume (versus 14% for Uniswap).

All of these are due to the good cooperative relationship between Curve and various project parties. Curve has Ethereum 2.0 pledge protocol due to ample liquidity /LP incentives. Support, became semi-official $stETH pool. Similarly, Curve's revenue on $sETH and $renBTC comes from Synthetix Ren And other synthetic asset issuers.

However, synthetic assets currently trade less than 2% daily on Curve compared to Uniswap's overall trading volume. While future growth in synthetic assets may benefit the Curve, the percentage is insignificant compared to volatility assets and stablecoin markets.

1.2.5 Agreement income

Curve 中所有 Token 的 Token 交换费用统一为 0.04%，存取款手续费在 0% - 0.02% 之间。而 Uniswap 在 V3 升级后交易手续费可用由用户自己定义。

根据 cryptofees.info 数据，Uniswap 近期平均日收入达到 65 万美元，而 Curve 平均协议日收入为 6 万美元。但 Uniswap 的收入全部支付给流动性提供者，其 Token $UNI 持有者所获收益为零。而 Curve 协议收入一半将分配给 $CRV Token 质押者。

Recent revenue of Curve protocol

All in all, both Curve and Uniswap are winners, but they are winning in different markets due to their different focus at this stage. Uniswap is in a standoff with Curve in the stablecoin market, and while it dominates the volatile currency pairs, it has lost out completely in the synthetic asset market. However, Curve has a more important function, which is to provide coin-minting credit to stablecoin projects.

2. Curve Ecology

很多人，至今还只把 Curve 简单理解为一个稳定币交易市场，其实，Curve 已经发展成一个简洁且庞大的以 DAO 治理驱动的资产流动性即服务的协议。许多项目为了降低流动性成本，都会主动拥抱 Curve 生态，而这一切都源于 Curve 教科书般的 Token 经济学。

2.1 $CRV Token

自 2020 年 8 月开始，Curve 通过启动 DAO 从而开启了去中心化治理之路。同其他 DAO 一样，随即在 2020 年 8 月 13 日，Curve 推出了原生 Token $CRV 作为 Curve DAO 的治理 Token ，初始发行数量为 13 亿，并开启初始预挖的奖励分发活动，预挖奖励的 Token 将在一年内线性解锁。

$CRV Token 赋予 Token 持有者投票治理权，流动性提供者也可以根据他们的份额价值和它在池中的时间长度来赚取 CRV Token 。此后在 2020 年 9 月又启动了治理 Token 分红机制，将交易费的 50% 分配给将 CRV 存入治理合约锁仓的用户。

$Total CRV is 3.03 billion and has been released $ The total CRV is over 1.5 billion, with about 1.08 million CRVS released daily. The distribution method is as follows:

62% to liquidity provider, 5% to early LP provider, linear unlock within 1 year

30% to shareholders, linear unlock in 2-4 years

5% combustible reserves, as community reserves

3% to team members, linear unlock in 2 years

$CRV Token 供应分配与时间表

$CRV Token 可以在 Curve 生态系统中扮演以下角色：

Governance voting: Locking $CRV acquisition $ VecrVs participate in the governance of the protocol through a time-weighted voting mechanism.

Value capture mechanism: The $veCRV governance voting mechanism facilitates various liquidity pools.

Lock-in incentive: A lock-in mechanism to earn value over time as a liquidity provider.

Fee destruction: Used to burn transaction fees to reduce inflation.

2.2 $veCRV Token

Curve 设计了著名的 VeToken（Vote-Escrowed Tokens）模型，锁定 $CRV 可以根据时间加权获得投票 Token $veCRV，锁定时间越长，获得的 $veCRV 数量越多，1 $CRV 锁定 4 年就能获得 1 $veCRV，而锁定一年只能获得 0.25 veCRV。**$veCRV 不能转账，因此获取 $veCRV 的唯一方式就是锁定 $CRV**。目前 48.94% 的 $CRV 已被锁定，平均锁定年限在 3.6 年。

Lock the $CRV fetch $veCRV rule

$CRV lock condition

\(CRV) VecrVs have three main uses:

Transaction fee

0.03% The other 50% of the Curve transaction fee is distributed to $veCRV holders. The $veCRV holder is fed back in the form of LP Token $3Crv of the Curve 3Pool stabilization pool (i.e. DAI+USDC+USDT fund pool).

Boosted rewards

$veCRV holders who also provide liquidity to the agreement will receive a liquidity incentive of up to 2.5 times depending on the term of the pledge, thus increasing the overall return on providing liquidity. If LP provides liquidity in 3pool, then they will initially get an APR of 0.22%, and if locked $veCRV can increase the reward to 2.5 times the limit, or 0.55%.

Governance vote

$veCRV 拥有着改变」衡量权重」（Gauge Weights）的权力，$veCRV 允许持有人参加社区投票以分配 CRV 奖励排放。Curve 项目托管许多流动性池，并且有固定数量的$CRV Token 可用来奖励这些流动性池供应商。而哪个池获得最多的 $CRV 奖励取决于 $veCRV 持有人在 DAO 进行的投票。作为个人，$veCRV 允许通过投票权影响 $CRV 收入。

此外持有 $veCRV 也有可能获得其他合作项目的潜在空投机会。我们可以通过以下这张图来表示 Curve 生态主要 Token 之间的关系。

$CRV value capture mode

Governance voting power is the most important function of $veCRV. For stablecoin projects, if stablecoin assets fluctuate wildly or the transaction depth is insufficient, the foundation of the project is challenged, and the business will decline. Therefore, the project side must find a way to make the market where the depth of the trade is the best and the stability is the best, in order to meet the demand for large trades that still maintain a low slip point.

The best DEX to make a market right now is Curve. To enter Curve's core liquidity pool, certain conditions must be met through community voting: at least 2,500 $VecrVs to initiate proposals (equivalent to 10,000 \ lock-in) CRVS for one year), more than 30% \(VecrVs to participate, more than 51% support. In addition, the liquidity incentive of each mine pool on the Curve platform will be determined by the $veCRV voting rights it has. In order to increase their annual returns, each agreement has to accumulate $vecrVs) and compete for the liquidity incentive of Curve. This increased the immediate demand for $ CRVS, which led to a persistent Curve War.

3. Ecological advantage of Curve

Curve War is a war between major project parties to accumulate $veCRV and compete for the governance right of Curve, so as to have power and influence on Curve DAO and ultimately provide users with higher benefits. The pool with higher annual returns will naturally attract more LP funds to obtain returns, and more LP funds will also mean a better depth and lower slip point exchange, thus forming a virtuous cycle of the project.

Curve is currently the largest liquidity concentration of stablecoin assets, controlling the governance right of Curve. Each pool can be motivated by $CRV through the Gauge governance vote of Curve, which is equivalent to controlling the liquidity baton ** on **Curve platform. In addition, if you have enough $ VecrVs, you can also set Metapool (pools that interact with the Basepool of the Curve base stablecoin pool) or even new Basepool (e.g. 3pools of USDT\USDC\DAI).

Basepool is important because, as the basic liquidity of Curve, it is not only recognized by other assets, but also indirectly enjoys the liquidity subsidy input of various projects on Curve.

因此，对于项目方而言，想要为自己的资产争取良好的流动性深度，就必须争取更多的 $veCRV 来获得治理投票权使自己的流动性池获配更多的 $CRV 流动性挖矿奖励，这样才会有 LP 来提供充足的流动性，稳定资产发行方的 Token 才能保证交易的交易深度，后续的业务开展才有了根基。

The daily output is used to dig incentive liquid \ (CRV, its core module is assigned by the Curve of DAO "[the Gauge Weight Voting] (https://dao.curve.fi/gaugeweight)", Users can vote in "Gauge Weight Voting" through their \)veCRV to determine the allocation ratio of $CRV in each liquidity pool for the next week. The higher the allocation ratio is, the easier it is to attract sufficient liquidity.

Gauge weight distribution

Yearn & NBSP participates in Curve War. In addition, Yearn Finance And other machine gun tanks (Vault), as well as Convex This provides vertical management agreements for the service of Curve's liquidity providers and $CRV's pledge), and drives the growth of several related ecological agreements. What has been Convex, which allows the provider to participate in Curve through its own entrance, so that users can have operations on the Convex, including pledge $CRV \, claim $CRV rewards). Compared with the retro and complex interface of Curve, it has a better user experience. And different from the operation restrictions that require locking on Curve directly and vary in weight according to the length of time, users ** don't need to lock $CRV to get revenue rewards. **

In addition, due to the competition among various people for the governance right of $veCRV, there will be vote bribery when there are votes. Among them, a series of Bribe platforms, which are convenient for direct communication between users and platforms, also emerge to act as the catalyst of this silent war, such as Bribe.crv, votium.app, etc.

After the Curve War, Convex has obtained the largest share of $veCRV, accounting for 42% of the total circulation. This means that Convex Finance has the most voting rights in Curve governance, which ultimately means that Convex Finance will be able to decide which working capital pool to apply to Curve Finance's Gauge weight (award lift).

Convex's share of $veCRV has gradually increased

Iv. Convex

Convex Finance 是一个专门致力于简化 Curve 使用流程的 CRV 质押和流动性挖矿一站式平台，即以太坊链上的收益聚合器。$CRV 持有者可以在 Convex 上永久质押他们的 Token ，并换取等额的 $cvxCRV 作为流动性，不仅可以享受与 $veCRV 持有者相同的 $CRV 激励，还能获得额外的 $CVX 作为奖励。而 Convex 从中得到的好处，就是从 $veCRV 持有者手中换来了完全自主的 $CRV 治理权。目前 Convex 已经成功地积累了足够多的 CRV，控制了约 42% 的 $veCRV，从而能有效地决定 Curve 上矿池的激励分配。

4.1 CVX Token 经济学

$veCRV -- Control Curve

在 Curve 设计的机制中，持有者只有凭借将 CRV 在锁定后获得的 $veCRV，才能够 ** 捕获 Curve 的价值、发挥 Token 的功能并行使治理权力 **。而要获取更多的 $veCRV，只能长时间锁定更多 $CRV。

$cvxCRV -- give $CRV ($veCRV) to the Convex

$cvxCRV is $ Mapping of CRV to the Convex, cast 1:1 for each CRV locked to the Convex.

By pledging \(CRV)cvxCRV to the Convex Convex, users need not lock $CRV. Although they have lost the voting governance right directly held by $veCRV, they will be awarded as follows:

50%Curve 交易手续费奖励。以 Curve 3pool LP Token $3Crv 支付；

10% of the proceeds of $CRV to the Convex LP pledge.

An additional $CVX bonus

However, the conversion of $CRV to $cvxCRV is not reversible, the user cannot convert $cvxCRV directly back to $CRV, but can only convert $cvxCRV to $CRV by trading pairs in the secondary market.

To sum up, users can transfer their veCRV) and exchange the opportunity of one-stop revenue through the form of $cvxCRV.

$CVX - Control of the Convex

$CVX 是 Convex 的原生 Token ，最大供应量为 1 亿枚，其中 50% 给到 Convex 平台上 Curve LP 提供者，25% 给到平台流动性挖矿奖励。与锁定 $CRV 获得 $veCRV 类似，**$CVX 持有者可以锁仓 $CVX 16 周，拿到一个 $vlCVX**，然后便可以参与 Convex 的治理权、指挥协议里的 $veCRV 来分配 Curve 上各个池的奖励多少。

$CVX allocation mode

The logical relationship between $veCRV, $cvxCRV and $CVX can be summarized as follows:

Convex 利用更具吸引力的 $cvxCRV 激励，换取了用户的 $CRV，同时用户可以把 $CRV 的 LP token 质押在 Convex 得到 Convex LP token。Convex 平台把收到的 $CRV 再锁定在 Curve 平台获取大量的 $veCRV 用于投票和加速，得到的收益再返回到 Convex 作为平台收益，Convex 再把这些收益发放给 $cvxCRV 和 Convex LP 的用户。而$CVX 作为 Convex 平台的治理 Token ，** 持有 $CVX 便相当于拥有了对 Convex 的治理权 **。

Convex value capture method

In short, by controlling the Convex, you control the Convex, and by controlling the Convex, you control the Curve. At this time, it can increase the incentive weight for a specific stablecoin pool, such as stablecoin project side bribery behavior. Unlike Yearn Finance, which serves the entire DeFi ecosystem, Convex It was essentially a vertical asset management agreement dedicated to the Curve, but it was no less Yearn Finance in performance.

As a result, the Convex Convex program and other Curve asset management agreements have also been the focus of debate.

Change in the ranking of $CVX held by each Convex DAO

Curve Stablecoin

Not long ago, the Curve in response to the \ (CRV is shorted, duly issued has been forecast for a long time the stability of the currency] [\) crvUSD white paper and code (https://github.com/curvefi/curve-stablecoin), but it is not the final version. Curve's Stablecoin and MakerDAO's There is no essential difference in DAI. As can be seen from this white paper, \)crvUSD and $DAI) are both collateralized stablecoins that deposit volatile assets and then lend out anchored dollars. However, $crvUSD has a few innovations: LLAMMA, PegKeeper, and monetary policy.

5.1 Why is Stablecoin Needed?

Curve itself has built up a large stablecoin market with deep liquidity. Why are so many stablecoins needed in the crypto world? As we know, the functions of traditional money include transaction, storage and accounting. While bitcoin has become an investment like gold, most cryptocurrencies move up and down like stocks, and only stablecoins are close to traditional fiat currencies, making them the safest safe haven for conservative investors, especially in today's highly volatile crypto markets.

Because Stablecoins are stable and efficient, many people are willing to hold stablecoins as a stable medium of exchange between volatile crypto assets, as well as participate in the various functions of derivative DeFi, which can earn stablecoin interest through lending and pledging. The availability of stablecoins mainly depends on its degree of stability and the breadth of application scenarios. Stablecoins can be roughly divided into the following three types:

Stablecoins secured by fiat money. Such as \ Tether a company (USDT and \ [Circle] (https://www.circle.com/en/), a company) USDC.

Stablecoins backed by cryptocurrencies. Protocol issuance, the creation of stable coins through over-collateralized crypto assets, such as $DAI issued by MakerDAO.

Algorithmic stablecoin. The flexible supply mechanism is adopted to adjust the price in the form of decentralization to maintain the stability of the algorithm, such as Ampleforth ($AMPL), Basis Cash ($BAC), $UST, etc. How to improve robustness and maintain anchoring is the design focus of this stablecoin.

5.2 Curve Stablecoin mechanism

5.2.1 LLAMMA Mechanism -- real-time algorithm clearing

There is no established credit market in the DeFi sector. At present, AAVE and Compound loan platforms use excess mortgage for borrowing. The limitations of this approach are the inefficiency of capital and the tendency of collateral to be liquidated in market fluctuations. To reduce the impact of the liquidation process, $crvUSD introduced a smoother liquidation algorithm called LLAMMA, which is also $ one of crvUSD's major innovations.

LLAMMA (Lending-Liquidating AMM algorithm) is a special AMM algorithm to solve the problem of instantaneous liquidation of excess mortgage loans, making borrowers' funds more secure. It solves the clearing problem by gradually clearing/de-clearing the user's collateral, allowing the collateral and $crvUSD to be continuously converted.

For example, when borrowing $ETH)crvUSD using \(ETH as collateral, if \(ETH price falls into the clearing range, $ETH will start selling \) Eth gradually until all $ETH is converted into stabecoins. If the price of $ETH goes up, LLAMMA will help users rebuy $ETH. If it fluctuates within the clearing range, it will constantly clear and go to clear, and constantly sell and buy ETH.

Simply put, the LLAMMA mechanism directly links the depositor's stablecoin pool with the borrower's mortgage pool through the AMM mechanism. Curve sets an additional clearing mechanism for AMM to assume the role of the liquidator, so that bad debts or large losses caused by user liquidation will not occur.

5.2.2 Automatic Stabilizer PegKeeper

With sufficient collateral, the price of $crvUSD) can be anchored near $1. However, in the secondary market, the price of $crvUSD will fluctuate slightly. To keep the price of $crvUSD stable, Curve has introduced an automatic stabilizer mechanism called PegKeeper.

When $the price of crvUSD exceeds the anchor price (i.e. the price is above $1) due to increased demand, PegKeeper can mint $crvUSD without collateral and deposit it one-way into the stablecoin exchange pool, making $the price of crvUSD fall. Even if no collateral is used during coinage, the liquidity in the liquidity pool can provide implicit collateral support. When the price of $crvUSD falls below $1, PegKeeper can withdraw part of the liquidity of $crvUSD, bringing the price back to $1.

Therefore, PegKeeper in this process is equivalent to selling \(\ crvUSD and buying \ when the price is above USD 1)crvUSD, which can not only gain profits, but also maintain the price stability of $crvUSD.

5.2.3 Monetary policy

Just as the Fed raises and cuts interest rates, Curve controls the relationship between the debt of the stabilizer and the supply of $crvUSD through monetary policy. When the debt/supply is greater than 5%, the parameters can be changed to incentivize the borrower to borrow and sell stablecoin, and force the system to burn the debt. When debt/supply is low, the borrower is incentivised to repay the loan, adding debt to the system.

5.3 Ecological effect

Curve launches its own stablecoin, which should generate positive incentives for the whole Curve ecology. The Curve team controls the liquidity between a large number of $veCRV, ** can guide $crvUSD and 3pool pools as voting rights, facilitating the cold start of crvUSD, which is an advantage that other stablecoin projects do not have. With deep liquidity, $crvUSD anchor risk will be much lower than other stablecoins **. In this way, a new DeFi flywheel effect is formed, which increases the revenue of the agreement. In addition, the borrowing cost of $crvUSD and the increased transaction volume of LLAMMA will also bring new expenses to $veCRV holders, thus feeding the whole Curve ecology.

In addition, the stable and high-quality decentralized stablecoin can make the crypto world gradually get rid of the stablecoin backed by fiat currency, and also provide the crypto world with more possibilities of self-hematopoiesis and the generation of base currency based on the original value of cryptocurrency.

summarize

通过提供低手续费、低滑点以及低无常损失风险的稳定币交易被用户熟知，Curve 已经成长为一个简洁且庞大的以 DAO 治理驱动的资产流动性即服务的协议，成为 DeFi 乐高世界里一块重要的积木。Curve 为 DeFi 世界带来的增值促进了相关生态若干蓝筹协议的增长，并激发了对于 VeToken 模型等一系列协议价值捕获 Token 经济学研究，从而促进整个 DeFi 世界流动性供应模型的发展。尽管目前市场震荡，但 Curve 仍是 TVL 前列的顶级去中心化交易平台，并且还在不断扩大自身的生态版图，在未来有望与更广泛的 DeFi 行业保持同步增长。