Curve Finance V2 Aims to Compete with DeFi’s AMMs

With its V2 update, Curve Finance will challenge other AMMs in the race for optimal capital efficiency.

Key Takeaways

Curve Finance has launched its V2 update. It now allows users to swap between uncorrelated assets.

To maximize capital efficiency, the DEX will automatically concentrate liquidity around the current price to offer better prices and low slippage.

With a first pool dedicated to ETH, BTC, and USDT, the project could be a challenger to the likes of Uniswap and Sushiswap in DeFi’s AMM space.

The race for innovation in the decentralized exchange sector is heating up. Curve Finance has automated concentrated liquidity for liquidity providers.

Curve Finance Targets AMM Takeover

Curve Finance (Curve) has launched its V2 update.

The latest version of the popular decentralized exchange offers direct competition to the likes of Uniswap and Sushiswap. The DeFi protocol specializes in allowing the most efficient exchanges between assets with the same value. It’s often used for trading between dollar-pegged stablecoins and token pairs like ETH/stETH.

The V2 of the protocol will allow users to swap between unpegged assets. The first pool to launch is WETH/WBTC/USDT. The project has also integrated an automated version of Uniswap V3’s concentrated liquidity feature.

Our algorithm for exchanging volatile assets is up!

On Ethereum: https://t.co/BXfrS3Vqi9
On @0xPolygon: https://t.co/Y559bpDlSh pic.twitter.com/X3MwDfUN96

— Curve Finance (@CurveFinance) June 9, 2021

Concentrated liquidity allows users to choose which price range they’d like to provide liquidity for. For example, instead of providing liquidity to every possible price of Ethereum on the ETH/USDT pool, liquidity providers (LPs) can target the 2,000-3,000USDT/ETH range to maximise the effectiveness of the liquidity as long as the ETH price stays in range. Uniswap boasted 4,000x greater capital efficiency at launch, but the feature was also criticized for requiring too much active management on the part of the user.

Through a complicated mathematical formula, Curve will automatically concentrate all liquidity from its LPs around the current price to reduce slippage and allow users to exchange large sums without majorly affecting the price of the asset. Curve has consistently been the most favorable option for DeFi users to swap stablecoins, even after Uniswap’s v3 concentrated liquidity feature threatened to surpass it. If its V2 update can maintain the protocol’s high standard of capital efficiency, other AMMs like Uniswap and Sushiswap could face another challenger in the DEX space.

Disclaimer: The author held ETH and several other cryptocurrencies at the time of writing.

Disclaimer Read More Read Less

The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.

You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.

See full terms and conditions.

Source: cryptobriefing.com