Curve (CRV) is the top-performing token in the decentralized finance (DeFi) marketplace this quarter. What are some of the factors behind this remarkable performance?
Curve’s CRV continues to decouple from broad market trends, rising even as other DeFi tokens weaken. CRX gained 113% over the past three months. During the same time, Aave (AAVE), Uniswap (UNI), SushiSwap (SUSHI), and Compound (COMP) are down 37%, 32%, 44%, and 41%, respectively.
Also, the Curve protocol sees its Total Value Locked surging. In 90 days, it skyrocketed by 70% as the platform’s activity increased, mimicking CRV token price.
About Curve Finance
The Curve is a decentralized exchange automated market maker. The platform boasts similar mechanisms to Balancer and Uniswap. However, Curve differs from other AMMs since it focuses on backing liquidity pools with somewhat similar priced assets. Examples of Curve pools are pools with wrapped volatile assets versions (for example, tBTC and wrapper-BTC) and pools based on stablecoins.
With this approach, Curve utilized optimized algorithms that reduce slippage and fees, translating to lower impermanent damage when dealing with the like-for-like token marketplaces. Also, Curve attracts market players with its charming old-style user interface, favoring material over style.
What Drives CRV Price?
CRV is the Curve platform’s native token. The token has recorded attractive upward price movements over the past sessions. That comes at the asset nudges towards being a net deflationary as CRV governance tokens see increased demand.
Besides offering trading fees share to liquidity providers, DeFi networks like Curve, SushiSwap, Uniswap, and Compound are somewhat generous on the governance tokens offerings.
The tokens allow the holder to claim responsibility in determining the protocol’s future direction and contributing to vital structural decisions. Also, the holder can enjoy a share of the protocol’s generated revenue. Moreover, governance tokens boast speculative value.
Curve holders can stake their CRV tokens on the platform for four weeks to four years period. The staking length determines the voting rights granted to the holder. CRV holders access escrowed-CRV or ve-CRV as voting tickets for governance decisions.
For now, Curve active liquidity providers enjoy nearly 750,000 CRV distributed daily. Curve users access rewards depending on the projected CRV tokens inflation rate.
The multiple benefits enjoyed by ve-CRV holders have attracted many CRV users, accumulating the asset and converting them to ve-CRV, boosting the protocol’s activity and asset’s price.