Curve Finance
Curve Finance (CRV) is an exchange liquidity pool that offers traders a platform with stablecoin trading and supplemental fee income for liquidity providers. The Curve Finance Protocol is governed by the CRV token. The project was launched in January 2020. [1]
In November 2020, Curve Finance distributed nearly $3 million in accrued fees to the platform’s Governance Token holders, following a community vote determining how "admin fees" were to be allocated. [2]
Curve enables users to engage in trading activities involving a range of stablecoins, including DAI, USDT, USDC, GUSD, TUSD, BUSD, UST, EURS, PAX, sUSD, USDN, USDP, RSV, and LINKUSD. In addition, the platform supports the trading of cryptocurrencies such as ETH, LINK, as well as various tokenized BTC assets like wBTC and renBTC. [17]
Overview
Curve is a decentralized, Uniswap-like exchange for stablecoins. By focusing on stablecoins, it is able to offer traders extremely low slippage, and liquidity providers enjoy little-to-no impermanent loss. Curve supports DAI, USDC, USDT, TUSD, BUSD, and sUSD (under beta), and it lets a user trade between these pairs quickly and efficiently. [8]
On March 10, 2020, Curve's creators unveiled the results of their second software audit from the Trail of Bits team. The second audit focused on reviewing fixes Curve's builders had put in place in response to their first audit, with a Trail of Bits specialist ultimately concluding in a follow-up report that they "correctly fixed the reported issues." [3]
Curve's smart contracts are written in Vyper. This newer language "allows [writing] new contracts quickly while not sacrificing on safety," the Curve team explained. [11]
On June 11, 2020, RenVM announced that it's partnering with Curve Finance via Ren Java Script module to allow users to earn yield on their deposited tokenized Bitcoin (BTC) on the Ethereum blockchain. It also allows for easy conversions between BTC and WBTC, with low slippage rates, allowing liquidity aggregators to use the bridge to enable conversion to any coin. [10]
On Sunday, June 14, 2020, Curve saw $3.5 million in daily trading volume, according to its self-reported stats. On Monday that shot up to $12.6 million; as of Tuesday, it was at $23.3 million in trading volume. According to Curve founder Michael Egorov, this is largely driven by demand for COMP, the freshly issued Compound governance token. [3]
On July 2, 2020, Decrypt reported that volume on the Curve Finance jumped by $213 million on the week COMP distribution launched, a ~16x increase from the previous week. [4]
Around late July, the protocol exceeded over $300 million in value locked. One of the main reasons behind the tripling in total locked value includes the release of YFI, yEarn's governance token, which has generated hundreds of millions in liquidity. [2]
Curve continues to ship new features and product upgrades such as adding virtually one new Curvepool per month, enhanced swap interfaces, and automatic staking onramps for liquidity incentives like Synthetix. In addition, Curve launched integrations with top DEX aggregators like 1inch, ParaSwap, and DEX.ag in tandem with asset management partners like Zapper, Zerion, and InstaDApp. [3]
In September 2020, Curve Finance joined Huobi’s decentralized finance consortium, dubbed the Global DeFi Alliance. Other new members comprise Aave, Synthetix, Balancer, Loopring, Zapper, Zerion, Bitpie, Mykey, and CoinGecko. [8]
On November 28, 2020, a week-long voting period seeking to determine how "admin fees" were to be allocated closed in favor of token holders. The vote passed unanimously with 95 votes cast in favor, representing 49.75% of the entire eligible voting pool. In three days, about $2,631,601.92 worth of fees – accrued before the vote opened – headed to community member coffers. The protocol will continue to disburse fees on a weekly basis following this initial payout, Curve CEO Michael Egorov told CoinDesk. [4]
In February 2021, the money market platform Equilibrium announced to be developing a cross-chain implementation of Curve Finance for its Polkadot parachain in order to create an automated market maker (AMM) accessible on both the Ethereum and Polkadot networks. [21]
In January 2022, the yield-boosting application, Convex Finance, surpassed $20 billion in total value locked (TVL), shortly after achieving the position of the second-largest DeFi protocol by TVL. According to data from DeFi Llama, the platform initially locked in only $68 million when it launched in May 2021, but it saw significant growth in the following months, surpassing older projects. It took one month to attract $1 billion and five months to reach $10 billion. [22]
In May 2022, Curve Finance integrated with Aurora, a layer of the Near Protocol that implements the Ethereum Virtual Machine (EVM). Aurora, as described on its website, is an EVM designed to provide complete compatibility with Ethereum. The integration enables users to connect their Ethereum wallets, such as MetaMask, to the Aurora network while using Curve Finance. By doing so, they gain access to the decentralized application's liquidity pools on the Aurora network. [23]
In August 2022, the protocol got hacked. According to a screenshot shared on Twitter, hackers managed to steal around $570,000 from Curve Finance. Following the disclosure, the protocol's operators communicated through Telegram, stating that they had identified the root cause of the issue and implemented a fix. They also advised users to promptly revoke any previously approved contracts on Curve if done in the past few hours. It was suspected that the hacker manipulated the domain name system (DNS) entry for the protocol, redirecting users to a fraudulent clone and gaining approval for a malicious contract. Nevertheless, the program's contract itself remained unaffected and uncompromised. [24]
In June 2023, Curve Finance CEO Michael Egorov was sued by DeFi venture capital firms ParaFi Capital, Framework Ventures, and 1kx. A complaint submitted to the Superior Court of California, San Francisco, accused Egorov of misappropriating trade secrets belonging to three venture capital firms and defrauding them of nearly $1 million. [25][26] In January 2025, Egorov's legal team secured a significant win when the lawsuit was dismissed on personal jurisdiction grounds, a decision that was later affirmed by California’s First District Court of Appeals. [37]
Automatic Market Makers
Curve has developed an AMM (Automated Market Maker) with a specific focus on assets that exhibit similar pricing characteristics, such as stablecoins or tokenized bitcoin. This design choice allows Curve to mitigate impermanent loss, reduce fees, and minimize slippage. Unlike platforms like Uniswap, which combine liquidity pools consisting of disparate assets like ETH and BTC, Curve's liquidity pools exclusively consist of stablecoins like DAI, USDC, and USDT, or solely comprise wrapped bitcoin tokens like wBTC and renBTC. [16]
Liquidity Pools
Liquidity pools consist of tokens held within smart contracts. For instance, if a pool is created with DAI and USDC tokens where 1 DAI is equivalent to 1 USDC, the pool would contain an equal number of tokens, let's say 1,000 tokens each (1,000 DAI and 1,000 USDC). [18]
When Trader 1 exchanges 100 DAI for 100 USDC, the pool would then contain 1,100 DAI and 900 USDC. As a result, the price would slightly shift downwards for USDC, encouraging another trader to exchange USDC for DAI and restore the pool to its average composition. [18]
Base vAPY
Curve generates revenue for liquidity providers through trading fees. When users make token exchanges on Curve or through partner platforms like 1inch or Paraswap, a small fee is evenly distributed among liquidity providers. This mechanism leads to an increase in the base vAPY (virtual annual percentage yield) as trading volume on Curve rises. Additionally, certain pools, such as Compound, PAX, Y, and BUSD, have the potential to earn interest from lending protocols by utilizing platforms like Compound or AAVE. While these pools can be more profitable during periods of high lending rates, it's important to consider the added layers of risk involved. [18]
All pools on Curve benefit from trading fees, and some pools offer additional incentives. By providing liquidity on Curve Finance, users can also receive CRV tokens. The amount of CRV allocated to each liquidity gauge is determined by the DAO's allocation decisions. It's worth noting that the vAPY can vary depending on the trading volume and volatility, as the fees distributed to liquidity providers are tied to the trading activity. Consequently, daily vAPYs can range from low to high based on the prevailing trading conditions. [18]
Curve Wars
"Curve Wars" are competitions among various DeFi protocols, each aiming to occupy a big portion of the liquidity present in the Curve Finance ecosystem. Curve Finance operates as an automated market maker with a specialization in facilitating low-slippage trading for stablecoins. [27]
A key objective is the accumulation of veCRV, which serves as Curve's governance token. Possessing veCRV provides individuals with voting power and the opportunity to participate in governance decisions that impact the Curve ecosystem. [27]
Furthermore, the competition entails determining which liquidity pool shall receive Curve's reward boost. Curve Finance often incentivizes participation by providing yield boosts or additional rewards to specific pools, encouraging liquidity providers to partake in their platform. [27]
CRV Governance Token
CRV Tokens are awarded to Curve.fi liquidity providers. There was no public sale or ICO. All users who provided liquidity on Curve have been awarded CRV retroactively from day 1 based on how long and how much they had provided liquidity to CRV for. [5][6]
With the release of a framework for the CRV governance token, yield farmers are moving to Curve to take advantage of some of DeFi’s highest APYs and the promise of retroactive token distributions. The hunt for CRV combined with a top trading venue for tokens that yield the highest APYs propelled Curve to the 2nd slot amongst all DEXs, from 7th before the yield farming boom started, sitting behind Uniswap's $142M, at $82M worth of volume at the beginning of July according to Dune Analytics. [5]
On August 23, 2020, Curve's founder, Michael Egorov acquired 71% of Curve DAO voting power. This sparked a controversy, as founder rewards are substantially higher than liquidity providers and other voters. Egorov addressed the action on Telegram, stating that this was done as a way to try to outweigh yEarn, and the move turned out to be an overreaction. He added that he does not want to possess as much power and hopes that it would decrease over time as the system shifts towards a decentralized environment. Andre Cronjke, yEarn's founder, calculated that 150 million CRV would be required to diminish Egorov's current voting power to 50%. However, the Curve team believes that the voting power would be evened out within days of this action. [2]
veCRV
veCRV is the token that users obtain by locking $CRV into the Curve Finance protocol. By doing so, individuals who lock their tokens gain governance privileges and receive 50% of the trading fees that are shared with veCRV holders. These fees are distributed in the form of $3CRV, which is the LP token for the TriPool stablecoin. [19]
Centralization Concerns
In August 2020, Curve Finance held its first governance vote. Curve founder Michael Egorov ended up with over 70% of the voting power. Curve lets CRV holders lock up their tokens to receive a separate voting token - veCRV. Holders can further use veCRV to vote on network proposals that are submitted via the Curve DAO. Users who hold a high amount of the voting tokens can also submit their proposals for consideration. [7][8]
Since the launch of the token in August, only a few CRV holders vote-locked their holdings. This has left only a handful of addresses with a significant amount of voting power. According to a Decrypt report, Egorov mentioned that only 6.7% of the ten million CRV tokens in circulation are vote-locked at the moment, indicating that only a few holders are taking part in the DAO. [2]
This would make it simpler for an address running a Curve liquidity pool on another protocol (such as yEarn) to gain control of a huge portion of the voting power. In an attempt to prevent this from happening, Egorov extended the “vote lock” for over 620,000 tokens under a single address, effectively gaining over 70% of the voting power. The longer a user locks up their holdings, the more voting power they have. Egorov maxed out his voting period for four years. [11]
Egorov said on Telegram that he ended up with majority voting power by trying to outweigh yEarn and that it was an overreaction.
“Terribly sorry. Let's fix that. I mean, I can abstain from voting but better to fix it in a proper way.”
Egorov told Decrypt that he doesn’t want to wield so much power and hopes his voting power will decrease over time as the system becomes more decentralized. [9][10]
Curve v2
In June 2021, Curve v2 was launched. The V2 version of the protocol allowed users to swap between unpegged assets. The first pool that was launched was WETH/WBTC/USDT. Additionally, the project integrated an automated version of Uniswap V3's concentrated liquidity feature. [17]
Concentrated Liquidity
Concentrated liquidity provides users with the ability to select a specific price range in which they want to provide liquidity. Rather than offering liquidity across the entire price spectrum of Ethereum in the ETH/USDT pool, liquidity providers (LPs) can focus on a specific range, such as 2,000-3,000USDT/ETH, to optimize the efficiency of their liquidity, given that the ETH price remains within that range. [17]
Curve employs a mathematical formula to automatically concentrate the liquidity contributed by its liquidity providers (LPs) around the existing market price. The purpose is to mitigate slippage and facilitate the exchange of substantial amounts by users without causing significant disruptions to the asset's price. [17]
CrvUSD
CrvUSD is the stablecoin released by Curve Finance that is overcollateralized and uses AMMs to autonomously swap between the collateral and the stablecoin to keep its peg. It was deployed on the Ethereum mainnet on May 2023. [14]
CrvUSD derives its value from assets such as USDC, Ethereum, liquid staking derivatives like Frax's sfrxETH, and liquidity provision tokens from stablecoin pools. [15]
Currently, borrowing against wsteth, wbtc, sfrxETH, and ETH is enabled. Curve Finance founder Michael Egorov facilitated the initial crvUSD loan, valued at $1 million, utilizing $1.8 million worth of sfrxETH as collateral. The mechanisms mentioned in the whitepaper state that the goal is to allow the peg to be stable without keeping large amounts of Peg Stability Modules and Vaults. [13][15]
The Llamas
In February 2023, The Llamas was launched. The Llamas serve as the "social layer" for Curve Finance, encompassing a collection of 1111 NFTs (non-fungible tokens) representing digital identities. Their purpose is to incentivize and acknowledge positive-sum actions within the ecosystem, whether they occur on-chain or off-chain. The Llamas adopt a system similar to POAP (Proof of Attendance Protocol) to facilitate these rewards. [32]
The Llamas represent a combination of NFTs and badges within Curve Finance. Initially, they function as entry tokens to the social layer. Each Llama possesses distinct badges, serving as a digital reputation system. These badges have varying effects on the Llamas' yield potential. Some badges permanently boost yield, while others provide temporary boosts that decay over time. In the future, external parties will have the ability to create and deploy their own badges, similar to the Degenscore system. These badges will be implemented as ERC-1155 tokens, allowing for issuance and assignment to different NFTs. [32]
Curve Hack
On July 30, 2023, a significant exploit hit several DeFi protocols on Curve Finance, resulting in attackers stealing a total of $62 million worth of cryptocurrencies. The attack was linked to a vulnerability in liquidity pools on Curve, and investigations pointed to issues with Vyper, an alternative programming language for Ethereum smart contracts, as the root cause of the exploit. The vulnerability in Vyper versions 0.2.15, 0.2.16, and 0.3.0 allowed attackers to manipulate the reentrancy guard, enabling them to execute multiple calls in a single function and trick smart contracts into calculating improper balances. JPEG’d, Alchemix, and Metronome DAO suffered significant losses, with $11 million, $13.6 million, and $1.6 million stolen, respectively. [22][23][24]
A number of stablepools (alETH/msETH/pETH) using Vyper 0.2.15 have been exploited as a result of a malfunctioning reentrancy lock. We are assessing the situation and will update the community as things develop. - Curve Finance
$5.4 Million Recovery
On July 31, 2023, an ethical hacker, known as "c0ffeebabe.eth," managed to recover approximately 2,879 Ether (worth around $5.4 million) from the exploiter and returned it to the DeFi protocol. The hacker used a front-running bot to secure the stolen assets and return them to the rightful custodian address of Curve Finance. During this controversy, Twitter accounts impersonating Curve Finance and hack victims have been promoting a fake refund scheme to target those who lost their funds. However, the official Curve Finance account has not announced any plans for a refund. [20]
On August 11, 2023, Curve Finance publicly announced its commitment to compensating users affected by the recent $62 million hack via a Twitter post. At that time, approximately 79% of the pilfered funds had been successfully recovered through ongoing investigative efforts. The platform intends to conduct a fair assessment of impacted users and provide reimbursements to ensure an equitable distribution of resources. [28][33]
"Quick post-hack update. While 70% of funds affected by the hack last week are recovered, active investigation with regards to the rest is underway. In the meantime, we are also working on measuring the respective shares of each affected user with the goal of proper distribution"
On June 13, 2024, Curve Finance’s soft liquidation mechanism successfully managed a real-world test during a hacking attempt, but the price of its native CRV token plunged by over 28% amid the chaos. According to blockchain analytics firm Arkham Intelligence, Founder Egorov faced $140 million in liquidations due to “borrowing $95.7M in stablecoins (mostly crvUSD) against $141M in CRV across five accounts on five protocols.” [29]
During the peak of the hack, Egorov faced paying $60 million in annualized fees to maintain his borrowings. Arkham explained:
“This is because there is almost no remaining [crvUSD] - (https://iq.wiki/wiki/crvusd) available to borrow against CRV on Llamalend. Three of Egorov’s accounts already make up over 90% of the borrowed [crvUSD] - (https://iq.wiki/wiki/crvusd) on the protocol. If the price of CRV drops by ~10%, these positions may begin to be liquidated.”
A few hours later, Michael Egorov claimed to have repaid 93% of $10 million in bad debt from the protocol’s soft liquidation triggered earlier in the day. [30]
The Curve Finance team and I have been working to solve the liquidation risk issue which happened today.Many of you are aware that I had all my loans liquidated. Size of my positions was too large for markets to handle and caused 10M of bad debt. Only CRV market on http://lend.curve.fi (where the position was the biggest) was affected.I have already repaid 93%, and I intend to repay the rest very shortly. It will help users not to suffer from this situation. - he tweeted [31]
Recent Developments
Record Q1 2025 Trading Volume
In the first quarter of 2025, Curve Finance processed a record-breaking trading volume of $34.6 billion. This represented a 13.3% increase compared to the same period in the previous year and set a new all-time high for the platform. The number of transactions also grew, reaching 5.5 million, up from 5.2 million in the last quarter of 2024. This growth occurred despite a general downturn in the broader DeFi market. [34]
L2 Development Controversy
In August 2025, a governance proposal was put forward suggesting that Curve Finance should halt all future development on Layer-2 (L2) networks and refocus its resources on the Ethereum mainnet. The proposal argued that L2 deployments were not profitable, generating a combined daily revenue of only about $1,500, compared to the $28,000 generated on Ethereum on a slow day. Data indicated that over 93% of Curve's trading fees since 2020 originated from its Ethereum pools. The proposal's author suggested that the high maintenance costs and the developers' time could be better spent on core Ethereum projects, such as increasing the adoption of the crvUSD stablecoin. The proposal recommended maintaining existing L2 operations but removing any L2-related items from the developers' future to-do lists. [35]
Curve founder Michael Egorov also commented on the broader L2 landscape in August 2025, stating that while scaling solutions have been evolving for years, he does not see "anything particularly special about 2025 in that regard." He suggested that the focus should remain on core protocol development and user experience rather than chasing the latest scaling trends. [38]
Token Valuation Philosophy
In February 2025, it was reported that Curve founder Michael Egorov was developing a new project called Yield Basis, aimed at solving the problem of impermanent loss for liquidity providers. The project raised $5 million in a token round at a $50 million fully diluted valuation, selling 10% of its 'YB' token supply to investors. Yield Basis intends to make liquidity provision for volatile assets more sustainable by using leverage and concentrated liquidity, initially targeting tokenized bitcoin and ether holders. [39]
Expansion to Tezos via Etherlink
Despite the debate around L2 profitability, Curve Finance launched on Etherlink, a Layer 2 blockchain built on the Tezos network, in August 2025. This expansion was part of Etherlink's "$3M Apple Farm Season 2" rewards program, which was created to encourage the growth of DeFi applications on the network. The integration aims to provide the Tezos ecosystem with deep stablecoin liquidity and efficient trading for pegged assets, bridging the Tezos and Ethereum-compatible DeFi ecosystems. [36]