Open Finance, mostly referred to as Decentralized Finance (DeFi), relates to the financial model facilitated by decentralized technologies, notably Blockchain. The basic concept is to devise composable finance rudiments that come as Smart Contracts but with some measure of Decentralization.
Grounded in stablecoins pegged to the US dollars, p2p payments, Crypto lending and savings, the sector is the most burgeoning in the Blockchain ecosystem. It has brought about variable use cases for individuals, institutions, investors, and even developers.
DeFi utilizes Ethereum’s Blockchain immutability, interoperability, and programmability to unleash growth potential, transparency, financial security, and liquidity. With Smart Contracts to automate and execute financial transactions that are auditable, Decentralized Finance protocols are fashioned to create a comprehensive ecosystem.
Experts in the Decentralized Ledger Technology sphere are increasingly pointing out that the domain will eventually dominate all sectors in the Blockchain space. In the last 16 months, more Defi projects are entering the market with disruptive products and services.
Let’s take a look at one high profile DeFI making waves in Cryptosphere and nurturing Financial Freedom and opportunities to the next level. It has integrations like Etherscan, Instadapp, Zapper.fi, Zerion, Spells.fyi, dydx exchange, and many others.
Curve.fi In Focus
Launched only in December 2019, Curve.fi took the scene by storm. In June, it recorded its all-time high volume of $47 million with cumulative deposits hitting $25 million. As a digital assets exchange with an on-chain liquidity pool deployed on the Ethereum Blockchain, it predominately has two main functionalities: remarkably efficient stablecoin trading and low-risk returns for liquidity providers.
Leveraging Smart Contracts, specifically CoinGecko, Totle,1inch, Paraswap, Pool.Fyi, Dex.ag, and others, Curve enables trading among stablecoins with low slippage, which is frequently associated with the use of DEX. It also has an inexpensive fee mechanism devised explicitly for stablecoins. Whenever a trade is executed on Curve, deposits holders earn by sharing the transaction fee. Additionally, it generates income for liquidity providers when the liquid isn’t in trading.
The network’s transaction fee for every pool is 0.04%. Everything goes to the liquidity providers since there is nothing like administrative cost. This is done by lending the assets to borrowers on the iEarn and Compound (cPool) platform. Curve.fi has a non-custodial wallet principle, which implies you are in charge of your funds.
Curve achieves its capability by arranging varieties of advanced bonding curves. Known as the Curve Formula, it creates very extreme hikes if the pool becomes inbalance because you have an exponential curve with the price getting expensive to the limit where nobody can practically buy.
Interestingly, the project has no tokens, neither did it run an ICO.
How To Use Curve
To trade, all you need to do is connect a Web 3 wallet like Trezor, Metamask, Ledger, Portis, Dapper, and others. Then you click on Buy and Sell and enter the number of tokens you intend to exchange against the pair.
For those who want to provide liquidity to the pool, you have to go to Deposits. Input the amount under each stablecoin to deposit and submit. Curve makes use of Compound (cTokena) and Pax (Ytokens) to give out loans and market-making, as the liquidity pool.
Other stablecoins like DAI BUSD, sUSD, TUSD, USDC/USDT/ can be deposited as well, and they will get converted beneath to Compound or Pax. If you have BTC, Wrap, and ERC20, transfer them into the ren pools. To take out funds, click on withdraw and type the percent of your liquidity you want. There is also an available option to cash out a particular asset.
Security And Audit
Though the Curve Smart Contract has gone under thorough auditing by Trail and Bits, they still insist it doesn’t guarantee 100% risk-free. As a result, the public is being cautioned to desist from using assets they can’t afford to lose or their savings as a liquidity provider. Even trading on the platform is considerably scarcely precarious. It is still not advisable.
There is a Bug Bounty program to guarantee the security of the network, with attractive prizes going as high as $50,000. You can report a vulnerability by sending a mail to this email: security(@)curve.(fi).
Curve is indeed an innovative project that is making a significant impact less than a year after entering the market. Kindly join the community on Telegram and Twitter. If you are more technical, here is the Github.