Curve Finance is a DEX designed for swapping assets that should trade at roughly equal values — stablecoins (USDC, USDT, DAI), liquid staking tokens (stETH/ETH), and pegged assets. Its specialized AMM formula gives dramatically lower slippage than standard AMMs for these pairs.
The StableSwap AMM
Standard AMMs (Uniswap's xy=k) have high slippage for same-value assets because they're designed for arbitrary price ranges. Curve's StableSwap formula concentrates liquidity near the 1:1 ratio, making it far more efficient for stable pairs.
For a $1M USDC → USDT swap:
- On Uniswap v2: 0.3–1%+ slippage
- On Curve: 0.001–0.01% slippage
This efficiency made Curve the dominant venue for large stablecoin trades and stablecoin-based DeFi strategies.
Curve v2: Cryptoswap for Volatile Pairs
Curve v2 (Cryptoswap) extends this to non-pegged assets. Instead of concentrating liquidity at a fixed price, it concentrates dynamically around the current market price and adjusts as the price moves.
Curve v2 pools include BTC/ETH, triCRV (CRV/ETH/USD), and other volatile pairs. Performance is competitive with Uniswap v3 for large trades.
veCRV: Vote-Escrow Governance
Curve's governance model is one of the most copied in DeFi. CRV token holders lock CRV for up to 4 years to receive veCRV (vote-escrowed CRV):
- 1 CRV locked for 4 years = 1 veCRV
- 1 CRV locked for 1 year = 0.25 veCRV
- veCRV balance decays linearly to zero as lockup expires
veCRV gives:
- Gauge voting: Direct CRV emissions to specific liquidity pools (pools with more votes get more CRV rewards)
- Fee revenue share: 50% of Curve trading fees distributed to veCRV holders
- Boosted LP rewards: Providing LP in pools you've voted for gives up to 2.5x boosted CRV emissions
The Curve Wars
Gauge voting created a metagame called the "Curve Wars." Protocols that depend on Curve liquidity (stablecoin issuers, LST protocols) bribe veCRV holders to vote for their pool's gauge, directing CRV rewards to attract LPs.
Convex Finance aggregated veCRV into cvxCRV, giving users liquid exposure to locked CRV voting power. Convex became the largest veCRV holder, giving Convex (and its CVX token holders) outsized influence over Curve emissions.
Votium is the main bribery marketplace — protocols deposit tokens here to bribe cvxCRV holders for gauge votes each bi-weekly epoch.
How to Earn Yield on Curve
Option 1 — Provide LP directly:
- Go to curve.fi and connect your Ethereum wallet
- Browse pools, find one you want to LP (e.g., 3pool: USDC/USDT/DAI)
- Deposit one or more assets — Curve accepts imbalanced deposits
- Receive LP tokens representing your share
LP tokens earn swap fees automatically. To earn CRV rewards, stake LP tokens in the gauge.
Option 2 — Via Convex (recommended for CRV maximizers):
- Go to convexfinance.com
- Find the pool's Convex vault
- Deposit LP tokens — Convex stakes and boosts rewards on your behalf
- Receive CVX rewards + boosted CRV + swap fees
Convex is typically more efficient than direct Curve staking for most users because it aggregates veCRV boost across all depositors.
crvUSD: Curve's Stablecoin
Curve launched crvUSD — an overcollateralized stablecoin using a novel liquidation mechanism called LLAMMA (Lending-Liquidating AMM Algorithm). Instead of hard liquidation at a threshold, LLAMMA gradually converts collateral to crvUSD as price drops, softening liquidation.
crvUSD has grown to hundreds of millions in circulation and is integrated across major Ethereum DeFi protocols.