{"id":760,"date":"2021-06-11T17:03:43","date_gmt":"2021-06-11T17:03:43","guid":{"rendered":"https:\/\/deficoins.io\/?page_id=760"},"modified":"2021-06-11T17:18:00","modified_gmt":"2021-06-11T17:18:00","slug":"curve-dao-token-review","status":"publish","type":"page","link":"https:\/\/deficoins.io\/review\/curve-dao-token","title":{"rendered":"Curve DAO Token Review: Beginners Guide to Understanding CRV Before Investing In It"},"content":{"rendered":"
The AMM (automated market makers) are making a significant impact in the crypto environment. They are seriously showing their capabilities in the area of stable coin trading. Liquidity platforms like PancakeSwap<\/a>, Balancer, and Uniswap<\/a> enable whosoever wants to become a market maker and earn rewards in return.<\/p>\n Curve DAO Token is a DeFi aggregator that allows individuals to affix their valued assets to various liquidity pools and earn rewards. It is an AMM protocol used to swap stable coins at a cheaper rate and slippage.<\/p>\n The ideology of Curve DAO Token is to profer a solution to the high cost of swapping assets in the Ethereum blockchain. The protocol is not up to one year old but is now the 3rd<\/sup> largest DeFi platform. This is because it has a high volume of locked value.<\/p>\n Curve DAO Token has a token known as CRV. It serves as the governance value. The token market value at the time of launching was a bit higher than that of Bitcoin. Other useful information regarding this aggregator (Curve DAO Token) is in this review.<\/p>\n Contents<\/p> Curve DAO Token is a \u2018decentralized\u2019 liquidity aggregator that enables users to add assets to various liquidity pools and gain fees in return. It is designed on the Ethereum blockchain to provide reliable trading services among cryptos with similar value.<\/p>\n Curve DAO Token can also be described as an AMM (automatic market maker) protocol just like UniSwap for exchanging stable coins.<\/p>\n The protocol focuses on the stable coin to enable trades at a very low slippage with little or no impediment loss on liquidity providers. Since CRV is an AMM protocol, it uses Algorithm for its pricing and not an order book. This pricing formula is very useful for easy swap between tokens with a relative price range.<\/p>\n CRV can be seen as a chain of \u2018asset\u2019 pools containing cryptos of similar value. These pools are currently seven in number. Three involve stable coins, while the rest are wrapped Bitcoin (like sBTC, renBTC, and wBTC) of different versions.<\/p>\n The pools give a very high interest rate on funds deposited to the liquidity providers. It has currently offered an interest rate of over 300% yearly for the Bitcoin USD pool.<\/p>\n This high yield is attributed to the Yearn finance. It uses the curve DAO Token during transactions to swap stable coins automatically to the highest yielding curve DAO Token pools.<\/p>\n Some stable coins that are popular and available in Curve DAO Token are sUSD, DAI, BUSD, USDT, TUSD, USDC, and others. The team released the protocol’s governance (CRV) token recently. This development made Curve DAO Token become a DAO ( decentralized autonomous organization.<\/p>\n Curve DAO Token is cautious of the potential risk associated with using their platform, unlike other DeFi protocols. The founder, Michael, has stressed the necessity of reviewing the code constantly to avoid any issues. They have already audited the DEX code 2 times. The curve DAO Token (CRV) has been audited 3 times.<\/p>\n The curve DAO Token primes to give a ransom of up to USD 50,000 to individuals that find any code error in their CRV, DAO, or DEX code.<\/p>\n Michael Egorov is the founder of Curve DAO Token. He is a Russian physicist and an experienced cryptocurrency veteran. Egorov started first by becoming a Bitcoin investor in 2013 during the pick period. He has been working around the DeFi network since 2018 and then launched Curve DAO Token in January 2020.<\/p>\n Michael continued using Bitcoin as a means of money transfer even after losing out on his first investment. He also mined Litecoin a little within that same period.<\/p>\n The protocol, ever since then, has become a successful platform leading in the DeFi environment. Michael said that Curve DAO Token exchange is created for Bitcoin and stable coin tokens on the Ethereum blockchain.<\/p>\n The CRV founder Michael first instituted a company known as NuCypher in 2016. This is a new technological company (fintech) with a specialization in encryption.<\/p>\n The NuCypher later transformed into a crypto\/blockchain project in the 2018 ICO and made over USD 30 million. It further made USD 20 million in 2019 from private funding though its token (NU) is yet to be in the major exchanges lists.<\/p>\n A team of 5 members, including the founder, worked on the project. They reside in Switzerland. The remaining four persons a developers and social media marketers.<\/p>\n Michael explained that the major reason for the diversion to a decentralized independent organization is to overcome all legal issues the project team may face.<\/p>\n CRV is simply a blockchain protocol that focuses on providing a platform for swapping few but specific assets that are Ethereum-based. It can be referred to as an AMM because it uses Market-Making algorithms to enhance its market liquidity.<\/p>\n This feature is not seen in the traditional DEXs. The protocol provides a decentralized trading environment that allows users to trade different altcoins and earn profits on their cryptos.<\/p>\n Michael also presented the white paper for the protocol on November 10th<\/sup>, 2019, before its launch in 2020. The platform was initially referred to as StableAwap.<\/p>\n It is designed to give stable coins Defi services using the AMM managed by smart contractors. The Curve DAO Token team decided to issue their peculiar governance token (CRV) in May 2020.<\/p>\n This feature solves the challenging conditions that may lead to market stagnation, as experienced when MakerDao reviewed their stability fee downward to 5,5%.<\/p>\n This situation made many using Compound (with an 11% interest rate then) remain there because they collected loans from DAI. They couldn\u2019t convert from DAI to USDC because the conversion cost was high.<\/p>\n Curve DAO Token as an AMM that facilitates automatic and permissionless trading of digital assets. It uses liquidity pools and does not permit trading between buyers and sellers.<\/p>\n A liquidity pool is like a shared bag of tokens with token prices calculated by a maths formula. The tokes in the liquidity pools are supplied by users.<\/p>\n Manipulating the maths formula aids in optimizing liquidity pools for various purposes. Users who possess ERC-20 tokens with an internet connection can supply tokens to the AMM liquidity pool. And then become a liquidity provider by doing such.<\/p>\n A liquidity provider is rewarded for supplying the pool with tokens. These rewards (fees) are paid by individuals or users interacting with the pool.<\/p>\n The Curve DAO Token protocol reduces spillage to the lowest minimum. This is well explained using the example below;<\/p>\n 1 USDT should be equal to 1 USDC, which should be approximately equal to 1 BUSD etc. (for the stable coins),<\/p>\n Then to convert a hundred million dollars (100 million )of USDT to USDC, you will convert it first to BUSD. There is certainly going to be an amount of slippage. The CRV’s formula is prepared to reduce this slippage to the lowest minimum.<\/p>\n The remarkable thing here is that the curve\u2019s formula will not be effective if the stable coins are not of a similar price range. The system is not designed to fix things outside its control. The formula only works well so long as the price of the tokens is maintained(stable).<\/p>\n The native token of Curve DAO Token, CRV, is an ERC-20 token that runs the Curve DAO Token decentralized exchange (DEX). The introduction of the token was made in 2020. CRV is a governance token for the exchange and is used in rewarding liquidity providers. So the holders can influence the direction of the CRV exchange.<\/p>\n Holding of CRV empowers the holders with the voting power on decisions on the DEX. When the holders lock their CRV tokens, they will be able to influence some operation on the DEX. Some of their influences include changing some fee structures and voting for the addition of new yield pools.<\/p>\n The holders can also present burning schedules for the CRV token. So the greater the number of CRV tokens a holder has, the greater his voting power.<\/p>\n Also, voting power on the Curve DAO Token decentralized exchange is dependent on the length of time a holder has the CRV in his possession. As the holding period increases, the voting power also increases. This also gives the CRV its value as a digital asset.<\/p>\nWhat is Curve DAO Token?<\/strong><\/span><\/h2>\n
Who Created Curve DAO Token?<\/strong><\/span><\/h2>\n
How Does Curve DAO Token Work?<\/strong><\/span><\/h2>\n
The CRV Token Explained<\/strong><\/span><\/h2>\n