Curve is a governance token powered by Curve.fi, also known as Curve Finance, a decentralised exchange (or DEX) that specialises in stablecoin transactions.
Like Uniswap, Curve is built on the Ethereum blockchain, making it easier to swap between ERC-20 tokens. Its native token, CRV, was launched in January 2020 during the Decentralised Finance boom. It has become the most widely used DeFi application that uses Automated Market Makers (AMM).
Tell me more about AMMs
An Automated Market Maker is a mathematical protocol that tracks the price of the US dollar and stablecoins attached to the price of Bitcoin. It relies on liquidity to facilitate trades using smart contract technology.
Curve’s AMM allows traders to exchange stablecoins like USDC or USDT and other non-stablecoin crypto assets without the need for a central order book.
Essentially, no buyers or sellers are needed to trade. Instead, traders interact with liquidity pools which investors fund by locking crypto in smart contracts. AMMs also aim to keep slippage reduced when there is a price difference while stablecoins are being swapped. This is called a bonding curve.
What is Curve’s role as a governance token?
The CRV token is the star of the show in Curve's world! It does a bit of everything, from helping with governance and staking to making sure liquidity providers get rewarded for the essential part they play in the ecosystem.
Curve is governed by a Decentralized Autonomous Organisation (DAO) that uses CRV to offer investors governance rights. Investors are rewarded for their contributions as liquidity providers with a percentage of fees and voting rights for locking their funds.
Anyone who owns CRV is considered an investor and those who’ve locked their funds for a lengthy period can vote on decisions about Curve’s management. Naturally, this means that investors who’ve locked their funds the longest (up to four years) have more voting rights.
Note
On Luno, you’re simply buying, selling, sending or receiving CRV, like any of our other supported coins. The crypto assets held in your Luno wallets are not involved in Curve protocol functions, such as vote-locking or governance. If you’d like to participate in any of that, you can visit Curve’s website to learn more.
Tip
Keen to explore Curve a bit more? You can learn about Curve basics and get all the latest cryptocurrency news on Luno Discover.
Want to know how to buy, sell, send, or receive Curve? We’ve got answers in the following help articles:
This information is not intended to be nor does it constitute financial, tax, legal, investment or other advice; nor is it a call to trade. The information is intended as general market commentary for information purposes only. Before making any decision or taking any action regarding your finances, you should consult a qualified Financial Advisor.