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2. Intermediate Course

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  1. 1. Ethereum 2.0 - What is it? 
  2. 2. What is cryptocurrency burning?
  3. 3. How to create your own cryptocurrency? 
  4. 4. Blockchain Oracle - what are oracles? 
  5. 5. How to make money with NFT?
  6. 6. What is an ERC20 token and how is it created?
  7. 7. The Metaverse – a new virtual world
  8. 8. Metaverse – TOP 15 virtual reality projects
  9. 9. Technical analysis – is it worth using?
  10. 10. What are DeFi liquidity pools?
  11. 11. Second layer (layer 2) - what is it? 
  12. 12. What are wrapped tokens 
  13. 13. What is the Lightning Network, and how does it work?
  14. 14. What are security tokens?
  15. 15. What is Play-to-Earn (P2E) and how does it work?
  16. 16. What are Social Tokens? 
  17. 17. Examples of the use of WEB3 on the blockchain
  18. 18. What is Web5? 
  19. 19. Ethereum London Hard Fork - what is it ? 
  20. 20. Segregated Witness - what is Segwit Bitcoin all about?
  21. 21. Polkadot - Decentralized blockchain and DOT cryptocurrency
  22. 22. Polkadot Parachain - Next-generation blockchain
  23. 23. Trading order types: stop loss, trailing stop loss, LIMIT
  24. 24. Set up of Stop Loss and Take Profit orders
  25. 25. What are Decentralized Cryptocurrency DEX Exchanges?
  26. 26. What is Curve Finance?
  27. 27. What is GameFi and how does it work?
  28. 28. Non-fungible tokens and NFT exchanges
  29. 29. Cryptocurrency steps - What is move to earn M2E?
  30. 30. What is Proof of Reserves (PoR)? How does it work?
  31. 31. Interoperability in the world of cryptocurrencies and blockchain
  32. 32. Blockchain and its layers - What is layer three in Blockchain (L3)?
  33. 33. What is Layer 0 in Blockchain technology?
  34. 34. What is layer 1 in Blockchain?
  35. 35. What is MakerDAO and DAI Stablecoin?
  36. 36. What is Blockchain sharding?
  37. 37. What is the NFT licence fee?
  38. 38. What is the SubDAO protocol, and how does it work?
  39. 39. The main differences between static NFT and dynamic NFT
  40. 40. What is minting an NFT?
  41. 41. Mainnet versus Testnet on the Blockchain. The complete guide!
  42. 42. What are NFT Ordinals? A guide to Bitcoin NFT.
  43. 43. Market Cap versus Fully Diluted Market Cap - the most important differences you should know!
  44. 44. MINA Protocol: the lightest blockchain in the world!
  45. 45. NFT Gas Fee - what is it? How can you reduce your gas fee?
  46. 46. Liquidity Provider Tokens (LPs). What are they, and why are they so important?
  47. 47. What is KnowOrigin NFT, and how does it work?
  48. 48. What is decentralized social media?
  49. 49. What is the Ethereum Name Service (ENS) and how does it work?
  50. 50. Arbitrum: Ethereum scaling solution - everything you need to know
  51. 51. Ethereum ERC-4337 - what is it and how does this standard work?
  52. 52. Sustainable Blockchain - Proof of Useful Work & Flux
  53. 53. Ethereum Proof-of-Stake (PoS) - what should you know?
  54. 54. Atomic Swap: What is an atomic swap, and how does it work with cryptocurrencies?
  55. 55. What Is Cryptocurrency Vesting? What Are Its Advantages?
  56. 56. What Is the Metaplex Candy Machine Protocol? How Does It Work?
  57. 57. What Is the BNB Greenfield Ecosystem?
  58. 58. Real Yield in DeFi - what is this trend? What does it consist of?
  59. 59. What Is Slashing in Cryptocurrencies?
  60. 60. How to Create Your Own Decentralized Autonomous Organization (DAO)?
  61. 61. The ERC-721X VS ERC-721 Standard – Key Differences!
  62. 62. Royalties – What Are They? How Does This Type of Licensing Fee Work?
  63. 63. Polygon 2.0 - the value layer for the Internet
  64. 64. ERC-6551 - the new NFT standard. What does it bring to the non-exchangeable token sector?
  65. 65. What is TradFi? The importance for cryptocurrencies!
  66. 66. What is the Real World Asset (RWA) trend in cryptocurrencies? Explanation and examples!
  67. 67. Pyth Network: a powerful oracle harnessing the power of Solana!
  68. 68. Vampire Attacks in Decentralized Finance (DeFi): Explanation and Examples
  69. 69. What are stables in the world of cryptocurrencies?
  70. 70. What Is Binance Oracle?
  71. 71. What is NFT Lending all about? An innovative solution in the world of cryptocurrencies!
  72. 72. Shibarium: A new era in the Shiba Inu ecosystem?
  73. 73. What is an ETF? How will an exchange-traded fund on bitcoin work?
  74. 74. Symmetric and asymmetric encryption - key cryptography techniques!
  75. 75. Cosmos SDK: Building the Blockchain Ecosystem
  76. 76. DAO Investment: A revolution in the world of finance and investment
  77. 77. What is cross-chain interoperability in Blockchain technology?
  78. 78. Blockchain trilemma - explanation of the problem. What is the impact on cryptocurrency payments?
  79. 79. Hedging in cryptocurrencies - great portfolio protection against risk!
Lesson 26 of 79
In Progress

26. What is Curve Finance?

In decentralized exchanges, they can do a lot. In previous lessons, we looked at DEXs. We will devote today’s article, Curve Finance. These decentralized stablecoin exchanges show that decentralized currency exchanges work better than many traditional exchanges.

Curve Finance – definition

Curve Finance is a decentralized exchange to Cryptocurrency trading. It focuses on stablecoins. It has very low fees and an efficient liquidity pool.

Curve supports the following stables: DAI, USDT, USDC, GUSD, TUSD, BUSD, UST, EURS, PAX, sUSD, USDN, USDP, RSV, LINKUSD, ETH, LINK, wBTC, renBTC.

Curve Finance Protocol is a relatively young DeFi solution. It has its native token Curve (CRV). CRV is to involve liquidity providers and users to manage the protocol. Due to the efficient pool of liquidity, other applications, such as Yearn Finance or Compound, use the platform’s ecosystem.

How does Curve Finance work?

Project Curve is often compared to the Uniswap platform. True – they have many things in common, and they differ only in the assets we trade on them. Curve has one important feature. It is the protocol AMM (Automated Market Maker). What does it mean?

AMM protocols operate thanks to the algorithms that support smart contracts. Using them, it is possible to effectively evaluate cryptocurrency assets in the liquidity pool, using various factors, e.g. current interest in a given asset. In this way, we eliminate any counterparties in the pool, as AMM transactions do not require their presence.

The advantage of liquidity pools is that we can buy or sell our stablecoins when we want. We don’t even need a buyer or seller on the other side of the transaction.

Fun fact: Liquidity pools are where liquidity provider tokens are stored. All to provide users with a smooth exchange.

Because the Curve protocol is completely decentralized, no order book is required. You can already see that the liquidity in the Curve pool is provided by the users of the ecosystem. The algorithms determine the prices of the assets in the pool and then allow traders to trade with smart contracts. 

Protocol liquidity providers and CRV token

Curve enables people to provide liquidity to their pool. We call them liquidity providers. In return, suppliers receive a certain amount of CRV. However, to use their native platform tokens, they have to block them for a while. They then receive a veCRV (vote-escrowed CRV). veCRV tokens give a kind of power. With these, suppliers can vote for different proposals in KNIFE whether to discuss changes to pool parameters.

What’s more – CRV tokens can also be staked which is an additional form of income. All we have to do is stake our CRV and in return, we will receive a part of the trading fees collected by the Curve protocol.

Can CRV tokens be purchased? Sure! This is a very popular altcoin that can be found on many crypto exchanges.

Advantages of Curve Finance

  1. As we mentioned at the beginning of the lesson, the protocol is focused on stable assets. It carries with it low investment risk and the occurrence of an impermanent loss due to asset volatility.

Impermanent Loss –when does it occur? When the price of the token changes after depositing it in the liquidity pool. Then the dollar value of our token is less than its value at the time of deposit.

  1. Stability. You can delete your liquidity pool at any time.
  2. Opportunity for high rewards and profits. Curve also provides interesting deposit bonuses for certain liquidity pools.
  3. Versatility. The CRV we earn on the platform can be used in other DeFi applications.
  4. Full minimization of slippage. Trading pairs are so similar to each other that they avoid slippage when trading.

How to make money in the protocol?

Curve is the only platform we can trade on stablecoins. Here are some ways to profit from providing a pool of liquidity to the ecosystem:

  1. veCRV tokens – by blocking CRV tokens, we get veCRV tokens. With its help, we can increase the APY of the deposit.
  2. Fees – Every transaction that is made using our pool makes us a profit.
  3. Yield farming – unused liquidity pools are deposited in other DeFi protocols.
  4. Boosted liquidity pools – Some liquidity pools offer providers high additional returns for their capital input.

Being the liquidity provider on the Curve Finance platform, we can actually match the income opportunity with what we like the most.

Curve Finance – the most important facts

  • It is a decentralized stablecoin exchange run by the community. Decisions are made by users based on the CRV token, which is subsequently converted into veCRV.
  • CRV is the platform’s native token. Thanks to it, we manage the platform, pay rewards to liquidity providers, and increase profits.
  • veCRV is the blocked CRV in the Curve protocol. We use veCRV to vote, increase rewards or earn money.
  • Liquidity providers are rewarded in CRV. It all depends on the size of the stakes in the pot.
  • CRV supply is reduced with combustion.
  • Transaction Fees. Not all are redirected to liquidity providers. Some of it is taken to buy and burn a CRV.
  • With a veCRV, we profit from exchange fees.
  • Curve Finance is still a little known and complicated protocol.

Summary

If you have a low-risk factor – this is the perfect platform for you. It puts stability above market speculation. Liquidity pools are not volatile as with Uniswap. The popularity of the platform will only grow. Considering the fact that the ecosystem becomes a part of its other DeFi, its development is worth following.