Taking a Look at CRV (Curve DAO): An Asset Spotlight for Geist Finance
Built on the Fantom Opera blockchain, Geist’s money market protocol allows users to earn interest on their deposited assets, and borrow any assets listed on Geist in an overcollateralized way.
The Geist asset spotlight is an educational series intended to introduce users to the many assets available as collateral on Geist and aid users in their research, earning strategies, or their fear of ghost-themed chains and protocols.
Abstract
Curve is the leading stablecoin-swapping protocol in the DeFi market. Benefits of Curve include low swap fees, reduced slippage, and virtually no impermanent loss when trading Curve’s growing roster of pegged assets, along with other high-liquidity assets (BTC, ETH, etc). With $8.8 billion in pool deposits and a daily volume in the hundreds of millions, it isn’t hard to see why Curve is a big deal. Additionally, with the introduction of Curve’s revolutionary bribe/vote mechanisms, the protocol’s impact on how DeFi distributes yield cannot be understated.
The Protocol: Curve
- Market Dominance
Curve is the leading stablecoin-swap exchange with 8.8B in TVL spread over 10 various chains. It has proven itself to be a pillar of DeFi, providing liquidity amid changing market conditions thanks to its advanced bonding curve algorithms. Much of the protocol’s success is derived from its established role as a safe harbor for stablecoin yield.
- Cross-chain
Curve is an Ethereum native token that has gradually moved to several other chains, including Fantom, Polygon, Avalanche, and many others.
- Staking/Liquidity Pools
Curve boasts hundreds of liquidity pools, many of which utilize stablecoin assets. Also, the ability for users to use Curve’s factory to create their own pools increases the flexibility of Curve’s liquidity providers.
- Voting/Bribes
Curve’s Voting/Bribe system allows users to use their locked CRV, or veCRV, to incentivise liquidity by voting on gauge weights. In other words, veCRV votes increase the share of yield distributed to user’s favorite pools. This innovation has spread to many other protocols, and led to the CRV/CVX wars over the last year.
The Asset: CRV
The CRV token is a governance token that also has reward-earning features. Users can lock CRV for up to 4 years to vote and claim protocol fees. Here are a few highlights of the token:
- Boost
Vote locking CRV allows users to acquire voting power to participate in the DAO and earn a boost of up to 2.5x on the liquidity they provide on Curve. Users claim CRV from each of the gauges they provide liquidity to in order to update their boost.
- Vote
Voting is carried out with Vote-Escrow CRV, or veCRV. In other words, the longer that users lock their CRV, the more voting power they gain and the bigger the boost they enjoy.
- Platform Fees
Every time a trade takes place on Curve Finance, 50% of the trading fee is collected by the users who have vote-locked their CRV. Every week, fees are collected from the pools and distributed as 3CRV, which is the LP token for 3Pool.
The CRV Supply
There is a total supply of 392 million out of 1.75 billion CRV in circulation, Coingecko shows. The remaining 1.3 billion are variously locked, staked, and earning yield, indicating very high market confidence in CRV’s use case as a reward token. It is important to note that, despite historical slumps in the market, Curve’s locked amount has increased steadily since inception.
CRV Use-Cases on Geist
Geist allows users to expand the power of their CRV. This is done by earning passive income, generated through both lending and borrowing options on the protocol. Users can employ their own money market strategies with a relative degree of safety, utilizing a clearly expressed, simple-to-use interface built on the AAVE 2.0 codebase.
CRV market size of Geist is currently at $1.46m USD. With a liquidation threshold of 65%, users can (relatively) safely expand their borrowing power according to their risk tolerance.
Recent volatility in the DeFi space means that users should be wary about which assets they put to work for them. We at Geist are proud to carry collaterals such as CRV, the security of which has been proven time and again.
About Geist Finance
Geist Finance is a decentralized, non-custodial liquidity market protocol operating on the Fantom Opera blockchain. The core Geist protocol is a lending market that functions near-identically to Aave. Users may borrow and lend different assets with variable interest rates.
