Overview
Curve is a DeFi protocol launched in January 2020 that specializes in efficient stablecoin trading using automated market maker pools designed for low slippage and minimal price impact. It became the backbone of stablecoin liquidity and a major source of yield for protocols and DAOs. Its native token is CRV.
How It Works
Curve's AMM uses a custom invariant that behaves like a constant-sum model when assets are close in price, which keeps slippage low for stablecoin trades, and like a constant-product model at extremes. This design makes Curve ideal for trading stablecoins and correlated assets. Liquidity providers deposit into pools and earn trading fees plus CRV emissions, and many protocols hold large positions in Curve pools as part of their treasury strategy.
Why It Matters
Curve is where stablecoins find deep, low-slippage liquidity, making it systemically important to DeFi. Its veCRV governance model locks CRV for voting power, aligning long-term incentives. Its complexity, however, has also made it a target for exploits, including the Vyper reentrancy incident, which underscored the risk concentration in critical liquidity infrastructure.
Related Concepts
Curve is an AMM specialized for stablecoins and correlated assets, reducing Impermanent Loss. It is deeply connected to the DeFi ecosystem, including stablecoin issuers and yield strategies, and is tracked among the top protocols by TVL.