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December 22, 2023

Update on "Curve" Decentralized Exchange Development

Matthew Liu, co-founder of SynFutures, and Michael Egorov, CEO and co-founder of Curve Protocol, discussed the innovation of decentralized exchanges at REDeFiNE TOMORROW 2023. "Curve & the Evolution of Decentralized Exchanges" was the topic of the discussion as it focused on innovation, evolution, and potential developments for the Curve platform.

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Discover "Curve," the major decentralized exchange platform in the industry that specializes in stablecoin exchange.

Curve is a decentralized exchange platform focused on trading stablecoins. Egorov says it was a stablecoin-only exchange platform. Later on, it was expanded upon and used to establish a stablecoin cryptocurrency exchange. As a result of learning from experience, the "StableSwap" algorithm was developed to make stablecoin exchanges more effective.

There are two main characteristics of Curve's stablecoin, "CRVUSD." The first is liquidation, a special CRVUSD feature that minimizes losses. Curve's Automated Market Maker (AMM) helps generate liquidity between collateral and stablecoin so that users do not have to pay collateral close to the required price. Thus, users can avoid collateral bills and increase leverage security. Another feature is "Peg Keepers," which adjusts token burning and minting to reflect shifting market conditions, preserving stablecoin value.

Additionally, Egorov explained the value of CRVUSD, which was tied to numerous stablecoins and helped lower the risk associated with de-pegging a single stablecoin. This mechanism also increases stablecoin's overall stability.


“Curve War,” a popular trend in the DeFi world

The "curve war" refers to competition among DeFi protocols for a piece of the huge liquidity in the Curve ecosystem. It is one of the trends that initially attracted the DeFi community. Egorov sees curve wars as a struggle for authority in strategy-related governance, such as disclosing liquidity and obtaining attractive compensation from pools. Projects with CRVUSD in their pools experience an intriguing effect and develop creatively. A fix to CRVUSD extends beyond giving users the token as rewards; it also includes the use of veCRV token to vote, and to ensure that the curve pool is liquid to power the CRVUSD production process.


An overview of the decentralized exchange (or DeFi) during Crypto Winter

Egorov believes an overview of the DEX movement provides detailed information about DeFi's visual component. He witnessed the steady growth of the stablecoin exchange, the integration of staking derivatives with multiple platforms, the staking on Ethereum, and the push in the FOREX market, which is anticipated to continue expanding due to the numerous stablecoins. Plus, he emphasized the significance of supervisory authority to comprehend DeFi's distinct features.


What effect will regulations have on DeFi?

Egorov stressed that regulations should be made appropriately and be able to accommodate the special characteristics and difficulties of DeFi. He felt that people had excessive expectations of how DeFi regulations would change. Since most supervisory authorities did not really understand DeFi and nearly prohibited what he did not even understand, he believed it should not be rushed. Due to the significant differences between DeFi and traditional finance, he hadn't anticipated that supervisory authorities would soon provide clarification on regulations. For example, traditional finance, which relies on centralized custodial authority, is not the same as non-custodial asset holders. Liu agreed with Egorov that before they could create precise regulations that go in the right direction, the authorities needed time to absorb new ideas and DeFi innovation. One of the duties of project leaders is to educate others by pointing out the benefits of decentralization and interacting with these authorities.


An overview of the Curve's prospects in the area of DEX

According to Egorov, it was highly likely that Curve would grow, with an emphasis on improving the efficacy of the exchange algorithm and expanding the exploration of future areas and derivatives within the DeFi ecosystem. He was aware of the areas' potential for growth and thought it was critical to inform the relevant parties and supervisory authorities about DeFi advantages.


Watch more on YouTube:Curve & The Evolution of Decentralized Exchanges: Landscape, Trends and Emerging Innovations

This article summarizes the virtual conference held in May 2023.

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