Buy Curve DAO
An Ethereum-based (ERC-20) token, the Curve DAO Token governs/empowers (by being locked into) Curve Finance, a decentralized exchange (DEX)/automated market maker (AMM) protocol specifically geared toward the efficient swapping a handful of kindred ERC-20 stablecoin assets on the Ethereum blockchain (e.g. WBTC and renBTC). Ethereum-based stablecoin-pairs-trading activity was seen as needlessly expensive, so, circa December 2019, Curve's founder, Russian physicist Michael Egorov, and his team set out to solve that.
Curve's liquidity pools pair up similar assets to keep volatility at bay within pools so as to minimize that strange and seemingly contradictory DeFi phenomenon known as "impermanent loss," which is when the price of an asset within an AMM's liquidity pool diverges away from the price of that asset outside of the liquidity pool resulting in a (merely temporary) imbalance.
In the early summer of 2021, Curve introduced its "TriCrypto" pool for yield farmers to lock in, and earn sizable yields from, one of a trio of assets, Tether (USDT), Wrapped Bitcoin (WBTC), and/or Wrapped Ethereum (WETH), while also minimizing slippage.
Curve in September of 2021 launched on Arbitrum, a layer-2 scaling solution for Ethereum. Instead of settling individual trades on Ethereum’s mainnet, as Decrypt noted, Curve's activities are batched and periodically settled, reducing congestion and transaction costs.
The current price of CRV
As of mid-September 2021, CRV was roughly $2.90, or more than 700% higher than where it sat in November of 2020.
CRV's market capitalization is roughly $1.2 billion, making it the 95th-largest crypto asset, as ranked by CoinGecko.
In the wake of the crypto-wide crash in May of 2021, CRV fell from nearly $4 down to less than $2 but by June it recovered, then spent the summer choppily trudging back toward $3. Unlike other DeFi tokens, CRV has remained fairly grounded owing in part to its cautiously deflationary nature.
How the price of CRV is determined
The total supply of CRV tokens has been capped at 1.6 billion tokens; the rate of new tokens entering circulation has begun to slow. There was no initial coin offering (ICO) on which to peg CRV's original valuation; in fact, in one of the oddest releases of a token possibly ever, an anonymous developer(OxChad) on August 13, 2020, used a publicly available smart contract code on Curve DAO's Github to "pre-mine" 80,000 tokens and then took to Twitter to rather abruptly announce that the CRV DAO accepted the token launch, taking the development team by surprise. Due to the token gaining traction, Curve Finance declared they had no choice but to go along with it. CRV was launched. Initially, CRV traded on Uniswap, rocketing above $1,000 but, after some major exchanges listed it, CRV was in the $50 range although that only lasted a few days. As of Aug. 17, amidst confusion about the controversial debut, and with then-still-minimal supply, CRV went to $4.
The circulating supply of CRV is estimated to be around 400 million.
When CRV launched, some 5% of the initial supply was set aside for early liquidity providers, a reward that vested over the course of the first year, so that allocation, as of mid-August 2021, was unlocked. CRV is used in rewarding liquidity providers.
The mining of CRV tokens is through stake drop and mining by way of yield farming.
Users who opt to stake their tokens directly on Curve Finance are offered an average APY of 21% and are given vote-escrowed CRV (veCRV) in exchange, which, Cointelegraph said, allows participation in governance votes that take place on the protocol.
For liquidity miners who are using Curve’s gauge system, total daily rewards will drop from about 752,918.6 to 633,126.5 CRV, meaning new circulating supply on a daily basis has now dropped by nearly 30%, The Defiant's Brady Dale said.
This could drive CRV's price higher if demand continues to rise while the available supply declines.
What the bulls are saying
According to Cointelegraph, there are three reasons why Curve DAO Token (CRV) is attracting the attention of analysts and these include attractive yields offered to token holders who participate in staking; competition for CRV deposits on multiple DeFi platforms; and healthy earnings for the Curve protocol as a whole, despite the market downturn.
CRV has been one of the most sought-after governance tokens since its launch in 2020, The Defiant's Brady Dale said.
Blockgeeks has said the Curve platform has become one of the best DeFi platforms to earn stable returns on locked coins and trade altcoins.
What the bears are saying
Those speculating on CRV really need to exercise caution because it is very risky, Boxmining said.
Technically, per TheMarketPeriodical, the CRV price as of mid-September sustains around "pivot zones" and continues in a downtrend. Accordingly, the trend remained bearish heading into the fourth quarter of 2021.
From The Market Periodical in fall of 2021: "After rejecting $3.4 on September 16, the bull rally of CRV token entered into a minor retracement state. Such pullbacks are mostly healthy to maintain a stable rally; however, the price has dropped more than the expectation."
This article is for informational purposes only and takes no account of particular personal or market circumstances, and should not be relied upon as investment, tax, or legal advice. For investment, tax, or legal advice and before taking any action you should consult your own advisors. Note that digital assets such as cryptocurrencies present unique risks for investors. Please see our disclaimer regarding risks specific to holding digital assets before investing.
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This content is correct as of October 2021
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