Curve Finance Tutorial: Easy Non-Collateral Stablecoin Swap
October 9, 2020
Add: Veronica Zubrii
Curve Finance is a decentralized Ethereum-based liquidity pool used for efficient trading of stablecoins. The low-slippage and low-fee algorithm reduces the risk of transaction failure and allows users to earn interest.
With the growing demand for affordable and comprehensive decentralized services, the list of DeFi services increases daily. Like QDAO and Compound, Curve Finance enables users to manage an extensive range of cryptocurrencies, including stablecoins. Founded in January 2020, it has quickly earned a spot in the list of Top-10 DeFi services, according to DeFiPulse.
Curve is an Ethereum-based decentralized liquidity pool worth $1.18 billion (as of August 2020). So far, it represents seven major pools: Compound, PAX, Y, BUSD, sUSD, REN and sBTC. Thanks to these, platform users can trade against these reserves and enjoy the minor fees and lower slippage rates.
The exchange rates for different pairs on each market can be checked in the Trade section:
Curve supports pairs with DAI, USDC, USDT, TUSD, BUSD and sUSD, as well as BTC. It has particularly lucrative rates for stablecoins trading.
What makes Curve special?
- First, freedom of collateral choice. Uniswap allows trading against ETH only. For example, to exchange TRX for USDQ, you need to convert TRX into ETH first. It involves extra fees and time spent. In Curve, stablecoins are traded directly one against another.
- Low slippage rate is another unbeatable advantage. The algorithm is designed to maximize liquidity, so there’s a lower risk of major rate fluctuations.
- It goes without saying, the trading fee – it’s as low as 0.04%.
Curve DAO (CRV) is the native token in Curve (which was launched on August 15 2020) and it also provides token incentives for liquidity providers in SNX, REN and BAL.
Although the platform is pretty young and is supposed to be vulnerable, developers manage to fix bugs in a timely manner. The protocol has proved to be safe so far.
Let’s observe how to perform a non-custodial token swap in Curve Finance.
How to exchange stablecoins in Curve
Open the Curve website. Start with connecting your cryptocurrency wallet: click on ‘Connect Wallet’ and select from the options:
You can switch your wallet by clicking the left button in the upper menu. This section also allows you to choose the liquidity pool. Each pool has a different set of tokens, for example, Y pool features stablecoins only.
Choose the cryptocurrencies you want to give and take from the lists. Enter the amount of crypto to exchange in the left field. The field on the right will display how many tokens you will receive. Pay attention to the exchange rate (below):
In Advanced Options, you can switch the pools, manually set the slippage rate and select the gas price depending on the speed of transaction. Double-check these details and click on ‘Sell’. Wait for the transaction processing – it might take several minutes. After that, assets will appear in your wallet.
How to deposit in Curve
Open the Deposit page. Enter the amount of cryptocurrencies you want to add. You can do it manually or by clicking on the available options – use Max amount or add coins in a balanced proportion. Look at the Bonus percentage displayed below: it’s calculated according to the sum deposited and the cryptocurrency. For example, USDT and TUSD don’t provide bonuses at all. Don’t forget to set the Max slippage rate.
Click on ‘Deposit’ and confirm the transaction fee in the wallet’s pop-up window. Click on ‘Edit’ to select the transaction speed and corresponding fee, which varies accordingly. Now you’re done.
Pro Tip: You can set the gas fee manually, but making it too cheap might lead to the transaction stoppage – you risk never having it confirmed.
There’s just one more thing you need to do to earn the interest rate – you need to submit your crypto reserves to the pool called Minter. The interface will show you the current CRV amount (available and locked). Enter the amount of CRV to deposit and the lock timespan. The starting voting power (veCRV) will be calculated automatically. Select the gas fee and processing speed.
You can customize the ratio of deposits spreaded over various markets. Scroll down and choose the percentage of wallet balance to be deposited. Don’t forget to enable the ‘Infinite Approval’ feature if you want this contract to be executed without approval further on.
Click on ‘Deposit’. Now your tokens are safely deposited and you can earn interest. Withdrawal of tokens is possible after the termination of the Lock period.
Despite its old-school interface, Curve is not as complicated as it seems – its functionality is pretty much the same as what other DeFi services offer. Yet, it makes the process simpler by eliminating some extra steps and connecting to crypto wallets automatically.
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