Curve DAO Token

Curve.fi is one of the most popular Decentralized Finance platforms. Curve acts as an Automated Market Maker (AMM) platform, which allows users to trade ERC-20 tokens without relying on middlemen. Curve focuses on the trading of cryptocurrency stablecoins, like DAI, USDT, and USDC. With the launch of Curve v2, new types of AMM were introduced. They allow for very efficient trading and lower risks of non-pegged assets.

Curve relies on liquidity pools (LP), rather than on matching buyers and sellers. These LPs are essentially pools of tokens sitting in a smart contract. These tokens may then be exchanged or withdrawn in accordance with the rules of the specific smart contract. In order for Curve to function properly, a high volume of liquidity needs to be maintained in the protocol's pools. As such Curve grants rewards to liquidity providers on the platform. Adding liquidity in the form of specific tokens to liquidity pools gives users an opportunity to earn on the pool's trading fees. Curve pools are non-upgradeable, which means that the pool smart contracts can't be changed. This ensures the safety of funds locked in the pools. Curve is also non-custodial, which means that users retain full control over their assets.

Curve Protocol is governed by a Decentralized Autonomous Organization (DAO). Users can submit and vote on proposals to influence the protocol. Governance relies on using Curve Finance's native token - CRV. Locking CRV rewards users with veCRV, which represents voting power. Locking CRV tokens for longer periods of time grants a higher amount of veCRV tokens.

When locked (staked), CRV tokens also allow users to earn on the platform's trading fees. On Curve, 50% of all trading fees are distributed to veCRV holders. These rewards are being distributed in the form of 3VRC (Liquidity Pool tokens for 3Pool). 3CRV can then be exchanged for stablecoins, or staked further to generate CRV tokens.

The third use for CRV is boosting CRV rewards. As mentioned earlier, vote locking CRV allows users to acquire voting power to participate in the DAO. It also gives them a boost of up to 2.5x on the liquidity they are providing on Curve.