DeFi 101
The Tie Research
DeFi 101: Curve Finance
By Gustavo Lobo
April 17, 2023
- (5%) to pre-CRV liquidity providers with 1 year vesting
- (30%) to shareholders (team and investors) with 2-4 years vesting
- 3% to employees with 2 years vesting
- 5% to the community reserve
- 62% to community liquidity providers
- 30% to shareholders (team and investors) with 2-4 years vesting
- 3% to employees with 2 years vesting
- 5% to the community reserve
- High Inflation - Curve’s issuance schedule is aggressive when compared to its competitors. This high dilution is especially relevant in an environment with lower demand for liquidity and a risk-off macroenvironment.
- Security - Like all protocols, Curve is susceptible to general smart contrast risks. While Curve is deemed secure by auditors, there are no guarantees of security. With that said, Curve has thus far withstood the test of time without any major exploits.
- Competition - Curve has a clear first-mover advantage and has established itself as the decentralized exchange for stablecoins. With that said, it’s entirely possible that newer iterations of competing platforms could implement tighter spreads for stablecoins and more accessible incentives, resulting in the dilution of Curve’s market share over the AMM space.
- If a large number of liquidations are required for the same commitment, liquidators may be stressed and struggle to keep up if the market continues to move downwards, posing a risk to protocol solvency.
- If full liquidation is eventually required, doing so through a series of partial liquidations would result in the user losing more collateral than a single full liquidation.
Stay up to date
Sign up to receive an email when we release a new post
convexconvex warscrvcrv financecryptocrypto pricescurve cryptocurve financecurve warsdecentralized financedefiDeFi summerstablecoinstablecoin AMMtokenomicsve modelve tokenomicsweb3
