Curve DAO $CRV

Curve DAO is a crypto project similar to Uniswap in function but with a unique focus. It is an Automated Market Maker (AMM) based Decentralised Exchange (DEX) that primarily facilitates swaps between assets that theoretically share the same value. This function serves a crucial need in the DeFi ecosystem, where there are numerous wrapped and synthetic tokens designed to reflect the price of the underlying asset.

Stablecoin Pools and Yield-Bearing Tokens

One of the largest pools in Curve DAO is the 3CRV, a stablecoin pool consisting of DAI, USDT, and USDC. The ratio of these coins in the pool adjusts according to the supply and demand dynamics of the market. This means that depositing coins with a lower ratio can earn the user a higher percentage of the pool, offering potential arbitrage opportunities when there is a significant imbalance in the ratio distribution.

In addition to regular tokens, Curve Finance also supports yield-bearing tokens. For instance, it has collaborated with Yearn Finance to launch yUSD pools, which include yDAI, yUSDT, yUSDC, and yTUSD.

Multiple Sources of Yield

Users participating in these pools can benefit from not just the yield from the underlying yield-bearing tokens, but also the swap fees generated by the Curve pool. Furthermore, with CRV tokens offered as yield farming rewards, liquidity providers in the pool can actually draw from three different sources of yield.

Conclusion

Curve DAO, with its innovative approach to asset swapping and yield generation, is a valuable addition to the DeFi landscape. By focusing on assets with presumed equal value and supporting yield-bearing tokens, it provides exciting growth and arbitrage opportunities for investors.