Curve is an exchange liquidity pool on Ethereum. Curve is designed for extremely efficient stablecoin trading and low risk, supplemental fee income for liquidity providers, without an opportunity cost.
Procotol Overview
Curve can be broadly separated into the following categories:
StableSwap: Exchange contracts and core functionality of the protocol
The DAO: Protocol governance and value accrual
The Factory: Permissionless deployment of Curve metapools
The Registry: Standardized API and on-chain resources to aid 3rd party integrations
Curve StableSwap Exchange: Overview
Curve achieves extremely efficient stablecoin trades by implementing the StableSwap invariant, which has significantly lower slippage for stablecoin trades than many other prominent invariants (e.g., constant-product). Note that in this context stablecoins refers to tokens that are stable representations of one another. This includes, for example, USD-pegged stablecoins (like DAI and USDC), but also ETH and sETH (synthetic ETH) or different versions of wrapped BTC.
A Curve pool is essentially a smart contract that implements the StableSwap invariant and therefore contains the logic for exchanging stable tokens. However, while all Curve pools implement the StableSwap invariant, they may come in different pool flavors.
In its simplest form, a Curve pool is an implementation of the StableSwap invariant with 2 or more tokens, which can be referred to as a plain pool. Alternative and more complex pool flavors include pools with lending functionality, so-called lending pools, as well as metapools, which are pools that allow for the exchange of one or more tokens with the tokens of one or more underlying base pools.
Curve also integrates with Synthetix to offer cross-asset swaps.
The Curve DAO
Curve DAO consists of multiple smart contracts connected by Aragon. Interaction with Aragon occurs through a modified implementation of the Aragon Voting App. Aragon’s standard one token, one vote method is replaced with a weighting system based on locking tokens.
Curve DAO has a token (CRV) which is used for both governance and value accrual.