Curve has a clear competitive advantage in the field of stable consideration asset trading. Its excellent token economic model further strengthens its moat and provides strong support for its token price. However, Curve’s valuation is too high at this stage.
Original Title: “CRV under Uni V3 Attack: Deep Analysis of Curve’s Business Model, Current Competition Status and Current Valuation”
Written by: Xu Xiaopeng, Researcher at Mint Ventures
Research points
1. Core investment logic
Curve is able to rank second in the battle for liquidity of the Defi agreement. It has TVL worth more than 10 billion U.S. dollars. It is the result of accurate product positioning, sophisticated mechanism design and long-term stable operation. Its core competitive advantage Lies in:
By focusing on the trading market of stablecoins and stable consideration assets in the early stage, we have built a strong dominance in this segment, and become the preferred platform for asset issuers, large-value traders, and market makers seeking stable returns. Network effect
Possess a very good token model, which is embodied in:
- The distribution of all scarce resources on the platform is deeply tied to the governance right, and the governance right (veCRV) needs to be exchanged for the token CRV. A large number of long-term lock-ups have reduced the circulating market value of the project.
- Fully introduce the game of the platform participants (liquidity providers, asset and bill issuers) to form a continuous competition for governance rights (veCRV), further increase the demand for CRV, and undertake continuous unlocking of CRV selling pressure .
- The final result of the above two is: a. The stable currency price guarantees the APY of the liquidity provider and retains the liquidity; b. The multi-participants of the system are deeply tied to the development of the Curve platform, which improves the participation in governance Degree and effectiveness; c. It creates extremely high conversion costs for the core participants, and it is difficult for them to leave if they have pledged a large number of CRVs for a long time.
2. Valuation
Challenges from Uniswap and other DEXs, unsuccessful development of new business in the transaction of non-stable consideration assets, and the centralization and supervision of the market share of stablecoins.
3. Main risks
Overall, Curve has a clear competitive advantage in the field of stable consideration asset trading. Its excellent token economic model further strengthens its moat and provides strong support for its token price.
However, whether it is a vertical historical valuation comparison or a horizontal comparison with other transaction agreements, the valuation of Curve at this stage is too high.
Basic situation of the project
Project business scope
Curve is a trading protocol based on the Automated Market Maker (AMM) model. It mainly focuses on the trading of stable coins, encapsulated assets (such as wbtcrenbtc), and pledged assets (stEth). However, it has recently begun to explore the trading of unstable consideration assets. business. Compared with other transaction agreements such as Uniswap and Sushiswap, Curve provides more concentrated transaction pairs, focusing on extremely low transaction slippage and handling fees, which can meet the needs of a huge amount of asset transactions.
Past development and roadmap
The Curve project was established in November 2019, and the timing of its important events is as follows:
Business conditions
Service object
Curve as a decentralized trading platform, the main difference between Curve and Uniswap and other comprehensive spot trading platforms lies in the types of transactions. At present, Curve’s trading types are mainly concentrated in stable coins (USD assets) and other BTC and ETH with a target price of 1:1. Derivative assets.
In addition, after the release of Curve V2, Curve also launched the Tricrypto pool, opening up the exchange of non-stable consideration assets such as USDT, WBTC and ETH.
It should be noted that, unlike Uniswap and other mainstream AMM spot trading platforms whose main service objects are market makers and traders, Curve actually has three main service objects.
The first two categories are market makers and traders. The third type of service objects are ignored by most people. They are the issuance and operators of stablecoins and derivatives of BTC and ETH, as well as the issuers of bills. For Curve, the magnitude of the third group determines its stablecoins. And stabilize the ceiling of the consideration asset business.
For stablecoin issuers, the first priority is to ensure that their stablecoin prices do not fall off the anchor, and that they have an excellent low slippage exchange depth at the anchor price point. To ensure these two points, the stablecoin can be The major premise for subsequent scenarios and user expansion is also the starting point for users’ confidence in the stablecoin.
However, these two points are not so easy to do, especially the “low slippage under huge transactions”.
Curve is currently the best solution to solve these two pain points of stable currency issuers. Therefore, most stable currency issuers will choose to establish stable currency exchange pools on Curve, and provide token subsidies in the initial stage to encourage market making. Providers provide liquidity.
At present, the US dollar stable currency UST operated by Terra, GUSD issued by Gemini, PAX and other well-known stablecoins, which have recently experienced rapid market capitalization, have established stable currency liquidity pools in Curve.
In addition, the emerging currency market protocol Liquity over-collateralized LUSD, algorithmic stable currency FRAX, etc., have also established an excellent depth on the Curve, and the excellent exchange depth is an important source of confidence for users to accept a stable currency. .
Curve has up to 26 USD stablecoin pools, https://curve.fi/pools
Similar to stablecoin issuers, there are BTC asset issuers on Ethereum. In addition to WBTC (mainly operated by the well-known cryptographic institution Bitgo), which has the largest issuance and strongest consensus, there are also Renbtc and Synthetix issued by Ren. sBTC, HBTC issued by Huobi, BBTC issued by Binance, etc.
The Ethereum version of BTC issued by these institutions wants to get more users and scenarios to adopt, and they also have to solve the problem of de-anchor and depth from the real BTC price. Therefore, these institutions have also initiated proposals on Curve through proposals and other methods. The liquidity pool of BTC assets ensures the stable consideration and depth of their BTC assets.
BTC asset pool on Curve, https://curve.fi/pools
Under the Eth2.0 POS mechanism, a large number of staking service platforms have emerged, such as Lido, Ankr, and so on. When users deposit ETH on these staking platforms to seek pledge rewards, they will get corresponding deposit certificates. For example, Lido’s ETH pledge certificate is stETH.
In the crypto world where Japan is an evolutionary unit, users are extremely sensitive to the liquidity of all their assets and applicable scenarios. Although stETH is behind relatively secure ETH assets, if it does not provide sufficient liquidity between stETH and ETH , Resulting in serious off-anchor or exchange difficulties between the prices of stETH and ETH, which prevents users from exchanging stETH back to ETH on the one hand, and on the other hand, it will also cause other head Defi projects such as Aave and Compound to adopt stETH. This will eventually cause users to be unwilling to choose Lido as their pledge platform.
Therefore, staking operation platforms like Lido and Ankr have also launched their own pledged asset certificates and ETH liquidity pools on Curve.
ETH asset pool on Curve, https://curve.fi/pools
In addition to the asset issuing party and the Staking platform, another type of institution that needs to build a liquidity pool in Curve is the issuer of the bill. The most mainstream bills are interest-bearing assets, such as Compound’s cToken, Aave’s aToken, Year’s yToken, etc. If the liquidity of the notes issued by them is sufficient, it will also be good for the development of their own business. This part will be detailed in the section of [Business Classification].
Market makers provide liquidity for Curve, and traders provide transaction fees for Curve. So what are the contributions of various asset issuance and operators to Curve? The answer is: huge demand for Curve tokens.
This point will be analyzed in the [Token Model] section.
Business Categories
As mentioned earlier, Curve’s trading business is divided into stable currency, stable consideration assets and other non-stable consideration assets. Next, we will sort out the situation of these several businesses.
Stablecoin trading
At present, there are 26 USD stablecoin pools at the core of Curve. Among them, the 3pool, Lusd+3crv and sUSD(DAI+USDC+USDT) pools with daily trading volume of more than 10 million USD are 82.2 million USD and 25 million USD respectively. And 17.3 million US dollars. Other large trading volumes include UST (6.8 million U.S. dollars), USDN (5.6 million U.S. dollars), MIM (4.2 million U.S. dollars) and so on.
It is worth mentioning that Curve’s Aave stablecoin pool (aDAI+aUSDC+aUSDT) on Polygon has a daily trading volume of up to 8.2 million US dollars.
PS: The above data are 2021.9.1 data.
Curve transaction data of the Aave stablecoin asset pool on Polygon, https://polygon.curve.fi/aave
In addition to the US dollar stable currency pool, there is also a euro fund pool on Curve, but the transaction volume and capital volume are not large.
It is worth mentioning that many of these stable currency pools actually contain “Defi notes”, such as cDAIcUSDC in the Compound pool, yDAIyUSDCyUSDTyTUSD in the Y (Yearn) pool, and The MIM in the MIM pool, these assets are not simple stablecoins, but vouchers that can be used to redeem the agreed principal + interest to the issuance platform, that is, the “notes” in traditional finance, but the issuer of these notes Both the payer and the payer are Defi projects. Due to the characteristics of their cash-like assets, we also classify them into the stable currency category.
The bill transaction liquidity pool on Curve, https://curve.fi/pools
Stable transaction of consideration assets
Stable consideration assets include BTC mirrored assets on Ethereum issued by various institutions, ETH pledge certificates, and synthetic assets created by Synthetix such as sLink.
The largest trading volume of BTC assets is the RenBtc pool, with a daily trading volume of 29.5 million U.S. dollars, followed by the SBTC pool with 9.3 million U.S. dollars.
The largest trading volume of ETH assets is the eth synthetic asset sETH pool created by the Synthetix protocol, with a daily trading volume of 8.4 million, followed by Lido’s ETH pledge certificate stETH pool with a daily trading volume of 4.5 million US dollars.
The Link synthetic asset sLink pool created by the Synthetix protocol has a daily trading volume of 1.3 million US dollars.
In general, the trading volume of stable consideration assets is much smaller than that of stable currencies.
Curve’s stable consideration asset trading pool on Polygon has only renbtc and wbtc, and the daily trading volume is only 130,000 US dollars.
PS: The above data are 2021.9.1 data.
Unstable consideration asset transactions
After the V2 version went live, Curve launched a fund pool for non-stable consideration asset transactions, and began to officially enter the trading market outside of stable assets. At present, the non-stable consideration assets in the main trading pool of Curve are mainly aimed at the two mainstream assets in the crypto world: BTC and ETH.
This fund pool is called the Tricrypto pool and contains assets of BTC, ETH and USDT, which means that market makers can deposit BTC, ETH and USDT, and traders can also use BTC, ETH and USDT to exchange the other two in this pool assets.
At present, the daily transaction volume of Tricrypto on the Ethereum version of Curve is 24 million U.S. dollars, and the Tricrypto pool on Polygon has a transaction volume of 10.2 million U.S. dollars.
Considering that the Tricrypto pool has been online soon, this is still a good result.
Factory pool
The pool factory is an experimental liquidity pool outside of the Curve’s core asset pool. It can be spontaneously established by users, and through a Gauge weight vote (one of the core governance modules of Curve, the daily output of CRV is determined by voting). Incentive distribution) function to obtain the incentive quota of CRV.
At present, the amount of funds in the factory pool is not large. The liquidity of the top-ranked ibEUR/sEUR fund pool is 19.45 million euros and the daily transaction volume is 1.5 million US dollars.
Factory pool on Curve, https://curve.fi/factory
Multi-chain business situation
Curve currently deploys services on the four chains of ETH, Polygon, Fantom and xDAI. The general situation is as follows:
Although the business volume of Polygon and Fantom has risen relatively rapidly, Ethereum is still the main business position of Curve at present.
Summarize
The author has counted and ranked the liquidity pool with the largest daily transaction volume of Curve on the Ethereum chain, as follows:
Some of these situations are worth noting:
Stable currency trading is still Curve’s largest business, accounting for more than half of the total. In addition to the two centralized stable currencies, USDT and USDC, decentralized and even algorithmic stable currencies such as LUSD, FRAX, and UST are in the stable currency business of Curve. The proportion has increased significantly.
The proportion of BTC and ETH packaging and derivative assets is also increasing, especially stETH, whose liquidity has reached a staggering 4.4 billion US dollars, accounting for nearly 40% of Curve’s total TVL
The liquidity pool of unstable consideration assets represented by BTC and ETH has developed rapidly, and the transaction volume is in the forefront. If the tricrypto pool on Polygon is included, the daily transaction volume will reach nearly 30 million U.S. dollars
In general, Curve’s stable currency exchange business still accounts for a relatively high proportion as soon as possible, but its business diversification trend is very obvious. This is reflected in the rapid start of transaction volume of unstable consideration assets, explosive growth of Staking asset business, and stable currency The development of more stable currency types in the section and so on.
Team situation
Overall situation
Curve is not an anonymous team, but it has not announced the current size of the team. On Linkedin, there are two current employees of Curve, the founder and CEO of Curve: Michael Egorov, and another core team member. Julien Bouteloup. In August 2020, Michael Egorov was interviewed by the encrypted media Crypto Briefing on Telegram. In the conversation, he said that 5 members have joined the team, namely two developers Angel Angelov and Ben Hauser, and three community work Staff Charlie Watkins, Kendrick Lama and Chris (well-known Chinese crypto KOL, Youtube: Mr. Block). And currently in the Discord channel of Curve, there is also a michwill in the identity group of the Curve team.
The team should currently be at least a group of 8 people.
Founder Michael Egorov
Michael Egorov is the founder and CEO of Curve. He received a bachelor’s degree in applied mathematics and physics from the Moscow Institute of Physics and Technology, a doctorate in physics from Swinburne University of Technology, and a postdoctoral degree in physics from Monash University.
In terms of professional resume, he has been working as a software engineer in many companies from 2007-15. In 13 years, he came into contact with Bitcoin. In 2015, he left LinkedIn to start his own business. He co-founded NuCypher and served as CTO, officially shifting from the traditional industry to the blockchain industry.
NuCypher aims to provide a data privacy layer for blockchains and dapps. In 2016, it received a seed round of investment from the well-known startup incubator Y Combinator, and in 2017 it received investment from well-known crypto organizations such as Compound and Polychain, with a total of US$440 million. Financing, the current code update of this project is still active.
During the NuCypher period, Michael Egorov began to use the MakerDAO protocol, and began to think about liquidity, dynamic mortgage and other issues. Curve was developed in the second half of 2019. During the development period, yearn founder Andre Cronje also participated in product design discussions.
In June 2020, Michael Egorov left NuCypher and became the full-time CEO of Curve.
Core member Julien Bouteloup
According to Julien Bouteloup’s information on Linkedin, he has been engaged in consulting work for blockchain business in his early years, and his clients include judicial and financial institutions. He joined the Curve team in January 2020, and at the same time he established Stake DAO, a platform that helps users obtain multi-chain revenue through staking, income farming and other operations. The platform also passed the Curve in February 2021. The community voted and joined Curve’s governance whitelist. The whitelist allows users to deposit CRV on the platform, and entrust Stake DAO to manage and obtain revenue. He is currently the CEO of Stake Capital, a Defi quantitative hedge fund.
Financing
Curve has not disclosed its financing and funding, but in the token distribution design, 30% of CRV tokens will be distributed to project shareholders.
Business analysis
Industry space and potential
Classification
The track where Curve is located is DEX. In addition to Ethereum, it is also deployed on other major chains such as Polygon and Fantom.
DEX is a concept opposite to CEX (centralized exchange). The main difference between the two is whether users have the private keys of their assets.
In the current DEX design, there are mainly two types: AMM and order book. The order book model is similar to the pending order matching model of a centralized exchange, and the AMM (Automated Market Maker) model is currently more Adopted by the agreement.
At present, the top DEXs in transaction volume and TVL on each main chain, including Curve and Uniswap on Ethereum, Pancakeswap on BSC, and Quick on Polygon, all adopt the AMM model.
Market size
According to Debank’s multi-chain data, the daily maximum trading volume of mainstream DEX agreements in 2021 reached 24 billion U.S. dollars (on the day of two plunges on May 19 and May 29), and the daily trading volume in the peak trading season from April to May was 70- 10 billion U.S. dollars. The recent 24-hour DEX transaction volume is around 4.7 billion U.S. dollars, which is nearly 9 times higher than the 500 million U.S. dollar transaction volume in the same period last year.
DEX daily trading volume in the past year, data: Debank
The number of active addresses of DEX has also experienced substantial growth. In 2021, the number of active addresses of mainstream DEX set a record of nearly 900,000 daily active addresses on May 12, and it has recently remained at the level of 400,000+ active addresses, a year-on-year increase. About 20 times.
The number of DEX daily active addresses in the past year, data: Debank
As one of the lowest-level protocols in the crypto world, DEX’s user volume and transaction volume will continue to rise with the development of crypto business.
However, as emphasized many times before, Curve’s strength lies in stabilizing consideration assets, and the foreign exchange market has always been an area that Curve wants to enter.
In an interview with encrypted media Rekt in July this year, the founder and CEO of Curve, Michael Egorov, said that Curve has plans to enter the foreign exchange market, but the method is to use stablecoins, which is one of Curve’s future growth sources.
What is the current daily trading volume in the foreign exchange market? About 6 trillion U.S. dollars.
In addition, Curve is actually the largest Defi bill trading market at present. As mentioned in the [Business Classification] section, Curve has a large number of active bill liquidity pools, such as cDAIcUSDC in the Compound pool, yDAIyUSDCyUSDTyTUSD in the Year pool, and aDAI in the Aave pool. aUSDCaUSDT etc. These bill issuers are basically the leading projects in the crypto world, and the higher the liquidity of their bills, it will also directly help their business development. It is foreseeable that the types of bills and market size in the Defi world will continue to expand in the future.
The bill transaction is a larger market than foreign exchange transactions. In 2020 alone, my country’s bill transaction volume will exceed RMB 148 trillion.
Token model analysis
Total amount of tokens and distribution
The core token of Curve’s project is CRV. CRV will be issued on August 13, 2020. The total amount is 3.03 billion. The distribution of the total amount is as follows:
- 62% distributed to liquidity providers
- 30% to shareholders, linearly unlocked within 2-4 years
- 3% to team members, linearly unlocked within 2 years
- 5% as a community reserve
At present, the total amount of CRV released is about 753 million, and the average daily released CRV is about 1.45 million.
The specific unlocking schedule of CRV is as follows:
Data source: https://dao.curve.fi/inflation
It is worth noting that, compared with most current projects, the planned release period of CRV is quite long. Even by 2026, only more than 60% of the total will be released. This also ensures that CRV sets aside for continuous liquidity incentives. Long-term budget and time.
Token value capture
The first thing that needs to be explained is that although the Curve token is CRV, in the mechanism designed by Curve, only the veCRV obtained after the CRV is locked in the Locker module can capture the value of Curve, play the function of the token, and exercise governance power .
The longer the user locks the CRV, the more veCRV they will get. Specifically, 1CRV can be locked for 4 years to get 1veCRV, and locked for one year can only get 0.25veCRV.
CRV locks the ratio of veCRV exchange, source: https://curve.fi/usecrv
There are two other mechanisms worth noting about veCRV:
1. veCRV cannot be transferred;
- As the locked CRV gradually approaches the expiration time, the number of veCRV will decay linearly.
The value of CRVveCRV to token holders includes–
Obtain the transaction fee of the platform: After the user locks the CRV token pledge, the amount of pledged veCRV will be used to obtain the fee share of most of the transaction pool of the whole platform. The ratio of the share is 50% of the total fee (the other 50% is given to the liquidity Sex providers), and the share is issued through 3CRV tokens (3CRV is the LP of the stable currency exchange pool 3POOL, which can be exchanged for other stable currencies 1:1).
Accelerated return of liquidity market-making: After locking the CRV, liquidity providers can use the Boost function to increase their market-making CRV rewards, thereby increasing their overall market-making APR. Where is the CRV required by Boost? The amount of funds in the pool and LP is determined.
Protocol governance: The governance of Curve also needs to be implemented through veCRV. In addition to the modification of protocol parameters, the scope of governance also includes the voting of Curve’s new liquidity pool, and the weight distribution of CRV’s liquidity incentives among various transaction pools.
CRV and veCRV capture the value of the overall agreement quite adequately. They can not only obtain the agreement’s fee sharing and accelerate market-making income, but also have a huge role in governance, which creates huge demand and stable buying for CRV.
In addition to Curve’s system, users lock CRV to obtain veCRV, and can also obtain continuous airdrops of tokens from other projects supported and cooperated by Curve.
For example, the DEX project Ellipsis on BSC will airdrop 25% of its total token EPS to veCRV users. Based on Curve’s liquidity and CRV pledge management platform Convex’s token CVX, 1% of the total airdrop will also be given to veCRV users. Equilibrium, a currency market agreement established on Polkadot, also has the possibility of airdrops.
The core demand side of CRV tokens
Unlike most project tokens that “emphasize cash flow capture but light functionality”, CRV tokens not only have cash flow capture capabilities, but also have strong functionality in the Curve system, with the focus being the control of governance rights.
In the top Defi of the same echelon, Curve’s governance participation, number and quality of proposals are among the top in the industry, and is hailed by many as the “model of DAO governance.” The reason for this is that the governance of Curve has higher value and scarcity than other Defi, which will attract a large number of institutional-level users to compete.
The first key question: What is the core value of platform governance rights corresponding to CRV tokens?
1. Judicial power for listing: platform pass card
As mentioned in the [Business Situation] section of the previous article, Curve is different from Uniswap, Pancakeswap and other general spot trading platforms. It mainly focuses on the transaction of “stable consideration assets”, whether it is UST or Huobi issued by Terra. The issued stable currency such as HUSD is still the ETH pledge certificate provided by Lido such as stETH, and they all have a strong “anchor demand”.
Stable consideration assets are different from the tokens of ordinary project parties. Project tokens can rise and fall, and the demand for transaction depth is also moderate. If the stable consideration assets issued by the project party fluctuate sharply and the depth is insufficient, it means the project The foundation of the company is shaken, and the business is bound to decline.
Therefore, the project party must find a way to find a place with the best depth and the best stabilization effect for the stable consideration assets issued by itself to make the market, so as to meet the trading needs of maintaining low slippage even under huge transactions. At present, there is almost only this ability. Curve.
Unlike anyone who can provide liquidity in Uniswap, if users want to enter the core liquidity pool of Curve, they must meet the conditions through community voting: more than 30% of veCRV voting participation and more than 51% of support. As the total circulation of CRV becomes larger and larger, this threshold will also become higher and higher.
CURVE Snapshot’s sCIP proposal, voting for the establishment of a liquidity pool for the stable currency MIM
Loan agreement dForce initiated a proposal in the Curve Governance Forum, hoping that Curve will add its stable currency liquidity pool
Regardless of whether the project that wants to be listed on Curve is to buy tickets for self-investment, or to find the support of large investors in the community, this has increased the direct demand of institutions for CRV. The role of CRV in this is somewhat similar to the voting rights of BNB and HT in the IEO frenzy in 2019, and it has become a rigid demand for the listing of projects.
2. The right to distribute CRV incentives: the baton of liquidity
Even after logging into Curve and opening a liquidity pool, the asset issuer’s work is far from over. If you want to strive for a good depth for your assets, you must allow your liquidity pool to be allocated more CRV liquidity mining rewards, so that market makers can provide sufficient liquidity and stabilize the asset issuer. Only with the tokens can guarantee the transaction depth of the transaction, and the follow-up business development has a foundation.
The distribution of CRV used for liquidity mining incentives is determined by Curve’s DAO core module “Gauge Weight Voting”. Users can vote on the “Gauge Weight Voting” through their veCRV to determine the CRV for the next week. In the distribution ratio of each liquidity pool, the higher the distribution ratio, the easier it is to attract sufficient liquidity.
CURVE’s Gauge Weight Voting voting interface, showing the distribution of CRV in the next cycle based on the current voting
Therefore, operators of stable assets still need sufficient veCRV for voting. In a sense, other liquidity pools are competitors of this asset operator. If you want to ensure that your asset liquidity is always sufficient under the incentive of CRV mining, you must continue to purchase CRV, continue to vote, and continue to use Curve In this battle without gunpowder, the “involvement” continues.
Summary: Due to the strong demand for anchoring and liquidity of assets issued by stable asset operators, let their stable assets land on Curve to establish a liquidity pool and obtain CRV liquidity mining incentives to maintain sufficient transaction depth. It is almost an inevitable choice for them. Therefore, these project parties have a large and long-term demand for CRV tokens to buy “Token Listing Pass” and “Liquidity Baton”. Of course, while obtaining project governance rights through CRV, these projects will also receive stable dividends from the Curve platform as a cash flow income.
The second key question: Who is fighting for CRV governance?
In addition to the issuer of stable consideration assets, another type of machine gun pool (Yield Farming platform) that has a strong demand for Curve governance rights, such as Year.finance (YFI’s project party), Harvest.finance, Vesper.finance, etc. Wait. Curve is almost one of the core revenue sources of all Ethereum machine gun pools due to its stable profitability, strong capital capacity and better security. They raise assets from users and deposit them in Curve after layers of encapsulation in order to obtain a commission + CRV token reward.
The machine gun pool also faces competition, and they need to provide users with higher income to increase their TVL.
Therefore, on the one hand, they need to purchase the liquidity provided by CRV to increase market-making income to meet the returns of users. The greater the amount of funds they deposit, the more accelerated CRV is required; on the other hand, they also need to The liquidity pool where your own funds are located strives for higher CRV liquidity mining rewards, so you need to continue to vote in Gauge Weight with veCRV. In addition, the machine gun pool can also initiate proposals that are beneficial to its own projects, or counteract proposals initiated by competing platforms.
Yearn bought CRVs several times this year and locked up their positions to accelerate their earnings and attract users
In order to better obtain the governance rights of Curve, Year.finance launched the Yearn backscratcher vault in November 2020. Users can permanently deposit their CRVs in the backscratcher vault to obtain a higher APY than the users who lock their CRVs in Curve. At the same time, Year has also obtained users’ voting rights, which can influence the decision-making trend of Curve and increase the income of all Year’s Curve-based fund pools, ultimately bringing more users and higher TVL to Year.
Stake DAO, founded by Curve core member Julien Bouteloup, joined the competition in January 2021, and passed the Curve DAO vote in February, becoming the second CRV depository agreement after Year to obtain the Whitelist of Curve governance.
Intensified competition has caused depository platforms to focus on improving user experience. In February 2021, Yearn launched yveCRV (the credential for users to deposit CRV in Year) and ETH liquidity pools for users who locked CRV in Year. , And let Sushiswap provide mining rewards for the pool.
In order to cope with competition, Stake DAO launched sdveCRV (the credential for users to deposit CRV in Stake DAO) and the liquidity pool of CRV on Balancer in May this year, providing users with a way to exit.
The strongest players in this governance competition appeared in May of this year.
Convex is a platform that provides services for Curve’s liquidity providers and CRV pledgers. Compared with Curve’s retro and complex interface, Convex’s user experience is better, and within 4 years, users who deposit CRV on Convex will receive Convex’s token CVX rewards.
Convex homepage, https://www.convexfinance.com/
After Convex was officially launched in mid-May, the veCRV it controlled surpassed Stake DAO and Year in only 2 and 14 days, respectively.
veCRV quantity comparison, data source: Dune Analytics
In addition to the incentives of CVX, Convex’s rapid rise also stems from its development support from the official Curve team and investment from the core staff of Curve, similar to the “pro son” of Curve, so it quickly gained the trust of the community. .
Perhaps because of this, despite the competition between Convex and Year on governance rights, in the April vote on whether to add Convex to the Curve governance whitelist, the veCRV controlled by Year also voted “Yes”.
At present, the veCRV owned by Convex already accounts for 30.8% of the total supply, second only to the 60.6% of Curve’s official pledge, and Year only accounts for 7.5%.
How long will this battle for governance rights last?
At present, as long as Curve still takes the lead in the exchange of stable assets, this war will not end.
Token model summary
As Curve said in the design goal of CRV: The main purpose of CRV tokens is to incentivize liquidity providers on the Curve Finance platform and allow as many users as possible to participate in the governance of the agreement.
In order to achieve this goal, Curve has made two key global designs:
The first design: All empowerment is given to voting equity tokens instead of CRV.
CRV itself has no rights and interests. Only by pledging CRV in exchange for voting rights tokens veCRV can it capture profits, perform functions, and participate in the governance game of the platform. Even airdrops for external projects are only sent to veCRV users.
The role and empowerment of veCRV, source: Curve document
And only by providing liquidity, the veCRV on hand can play its maximum effect: 1. Through the Boost function, speed up the rate of return of their liquidity; 2. Vote for their liquidity pool and strive for more CRV distribution.
The second design: hand over all the core resource allocation of the platform to DAO, and fully introduce competition in governance.
As mentioned earlier, the competition for CRV by asset issuers, income platforms and other institutions is essentially a struggle for the governance right of Curve. The reason why governance is so precious is that the distribution of Curve’s core resources is determined by the DAO:
● Approval right for listing
● Distribution rights of liquidity
● Key parameters
● Governance whitelist
● ……
With the continuous release of CRVs, the original governance rights will continue to be diluted; on the other hand, as the CRV lock-up time gradually expires, the number of corresponding veCRVs, that is, the governance weight, will gradually decay, so I want to continue To maintain influence, it is necessary to continue to buy CRV, or continue to extend the lock-up time of CRV.
This also explains why the average lock-up time of CRV has reached a staggering 3.64 years (up to 4 years).
CRV’s average lock-up time, https://dao.curve.fi/locker
The game and involution of various institutions on Curve has generated continuous demand for CRV, stabilized the price of CRV under a large number of additional issuances, and supported Curve’s market-making APY, which attracted liquidity, which formed One cycle.
这两个设计，正好应和了「尽可能多的用户参与协议的治理」以及「激励Curve Finance 平台上的流动性提供者」这两个代币的设计初衷。
Curve 的经济模型思路给业内的很多项目也提供了养分，在Cream、Mobox 近期发布的新版通证模型中，我们能都看到Curve DAO 的影子。
然而，要保证Curve 通证经济的循环继续，有一个先决条件：Curve 能继续维持其在稳定对价资产上的垄断地位，持续收取其对于资产发行方和收益耕作平台的「垄断租」。
而非行政垄断在大多数时候往往是脆弱的，在日新月异的加密世界里更是如此，Curve 的挑战者已经出现了。
这点将在下一节「项目竞争格局」中讨论。
项目竞争格局
基本市场格局& 竞争对手**
中期来看，Curve 立足稳定对价资产，同时探索非稳定对价的交易市场。尽管交易品种的外延在扩展，但为交易者提供「大金额、低滑点、低手续费」的服务，为做市商提供「简单、安全、稳定」的收益来源的产品定位并未发生变化。
结合TVL、交易量、社区声望以及与外部协议的组合数量来看，目前真正能让Curve 感到害怕的对手只有Uniswap。
笔者将就目前两者的竞争态势进行比较和分析。
Uniswap vs Curve：交易量
在以太坊上，Uniswap 的交易量占据绝对优势，V3 上线也对其的业务增长起到了较大的推进作用，从今年5 月的总交易额占比52% 左右，上涨到近期的68%，6 月底最高时一度达到71%。同期Curve 的交易量在10%-6% 之间徘徊。
如果将Curve 近期在Polygon、Fantom 上的交易量纳入，那这个数据则可以再提高1-2 个百分点。
以太坊主流DEX 周交易额占比，数据：Duna Analytics
Uniswap vs Curve：TVL
从锁定的流动性来看，Curve 拥有行业领先的数据，其9 月2 日的TVL 为127 亿美金，同时期UniswapV2 （49.4 亿）+V3 （27 亿）版本的TVL 总金额为76.4 亿。这一方面意味着Curve 拥有着更好的整体深度，另一方面也意味着对于做市商来说，整体资本效率是Uniswap 更高（但也意味着更高的做市风险）。
Defi TVL 排名，数据来源：Defi Llama
Uniswap vs Curve：核心稳定币业务
Curve 为了利于稳定资产的高额低滑点兑换，在稳定对价资产的兑换公式上没有采用传统的AMM 恒定乘积公式，而是通过将xy=k 与x+y=k 两个基本价格曲线按照一定权重比例进行拟合。其具体的公式如下：
来源：Curve 白皮书
而Uniswap 在升级V3 版本之后，为做市商推出了灵活的自定义参数，做市商可以任意决定自己流动性的分布范围。在这个机制下，Uniswap 上的稳定币做市商统一把稳定币的做市范围集中在1:1 对价附近，这相比以往大大提高了做市的效率，降低了稳定币兑换的滑点，此后Uniswap 的稳定币交易量迅速上涨。
交易量
Curve 上最大的稳定币交易池是3POOL，包含USDTUSDCDAI 三种稳定币的兑换，而USDTUSDC、USDCDAI 和USDTDAI 同样是Uniswap 上交易量前三的稳定币对。我们来做以下对比：
我们发现，尽管Uniswap 在三个主要稳定币的流动性远小于Curve 的3POOL，但却创造出了更高的交易量。不过Uniswap 的交易多以几千和小几万的交易为主，交易笔数更多，而Curve 的大额交易更多，交易笔数更低。
尽管目前UniswapV2 的总TVL 仍然高于V3，但其稳定币的流动性和交易量大部分都已经迁移到V3 上，具体如下：
由此来看，Uniswap V3 推出以来，对于其稳定币交易业务的推动是非常明显的，在三个核心稳定币的交易量上高于Curve 的3POOL。
当然，由于Curve 除了3POOL 之外，还有着更丰富的稳定币交易池（如sUSD），且都具备不小的交易量，所以在稳定币交易总量上，Curve 目前还是领先于Uniswap。
交易滑点
从交易深度和滑点来看，我们使用从小到大的多笔交易金额来测试用USDT 购买USDC 的情况，以衡量同样交易金额之下，两个平台的交易损耗（手续费+滑点）情况：
我们发现，目前不管是小金额还是大金额，大部分情况下Curve 的交易损耗都比Uniswap 要少60% 以上，随着交易金额的进一步上升，当来到7000 万以上的兑换量级，Curve 依旧可以保持其低滑点的水平，Uniswap 则会因为脱离做市商设置的流动性区间而基本无法达成交易。
总体来说，交易量越大，交易者使用Curve 的动机就越强，亿级单位的单币交易，目前仍然只有Curve 可以承载。
上月在Curve 完成的一笔高达1.6 亿美金的交易，数据：etherscan
Uniswap vs Curve：其他稳定对价资产
如WBTC 与RENBTC、stETH 与ETH 等稳定对价资产，目前在Uniswap 上基本则没有流动性，Curve 在这部分交易市场处于垄断状态。
Uniswap vs Curve：非稳定对价资产
Curve 在今年6 月发布了V2 版本，推出了多维恒定乘积公式：
Curve 在其V2 白皮书《Automatic market-making with dynamic peg》中这样说到：「我们设计了一种为不一定相互挂钩的资产创造流动性的方法，这种方法比恒定乘积等式x · y = k （Uniswap 采用的AMM 公式）更有效。我们把流动性集中在由当前「内部预言机」提供的价格附近，且仅当损失小于系统赚取的部分利润时，才会移动该价格。这将创造比Uniswap 恒等式算法高5 – 10 倍的流动性，并为流动性提供者带来更高的利润。 “
如果将该新公式应用在双币资产池里，其状态就如图中橙色的曲线，而图中蓝色曲线是原V1 版本的公式曲线：
Curve V2 白皮书中作为举例的价格曲线，来源：Automatic market-making with dynamic peg
与Curve V1 中通过将xy=k 与x+y=k 两个基本价格曲线按照一定权重比例进行拟合类似，Curve V2 的价格曲线也是由其他基本曲线拟合而成。简单来讲，就是曲线在交易价格附近更接近Curve V1 的曲线形状（蓝色），而在远离交易价格的位置，则更加接近xy=k （左下方虚线）。以此构成了一个在交易价格附近更平滑，但在远离交易价格范围后弧度更大的一条价格曲线（橙色）。相比V1 版本中更接近于一条直线的价格曲线，V2 的曲线在远端的弧度更大，以此增加对非稳定币交易对的支持程度。
这里就要说到Curve V2 一项最关键的改进，就是当代币市场价格偏离原聚合范围时，可以对流动性进行自动再平衡，重新构造一条适用于新价格的曲线。对于如何感知代币市场价格的变化，大多数项目会选择采用外部预言机，但外部预言机会存在被操纵的风险。
Curve V2 为了彻底杜绝预言机攻击的可能性，选择以内部数据作为参考价格，并将这种机制称为指数移动平均（exponentially moving average）预言机，简称EMA。这个EMA 预言机提供的报价，是根据Curve 的历史成交价以及最新的交易信息综合计算得出一种参考价格。这个参考价格有些类似于技术分析中的均线，将根据最新的成交价格进行动态调整，但在调整的同时也会保有一定的滞后性，以免在价格剧烈波动时过度频繁地触发再平衡机制。
有了内部预言机提供的参考价格，系统便有了进行再平衡的触发依据。当EMA 预言机报出的价格偏离原始价格超过一定范围后，协议便会自动对整条曲线的形状进行调整，使得流动性重新聚合于最新的交易价格附近。
目前该机制已经应用到Curve 的非稳定对价多币种资金池中，称为Tricrpto pool，目前在以太坊和Polygon 上均有部署。
Curve 在以太坊和Polygon 上的Tricrpto pool
从近日的数据来看，以太坊+polygon 的Tricrpto pool 日交易量已经达到3000 万美金以上。
正如Uniswap 的V3 方案威胁到了Curve 的稳定币交易市场，Curve 推出的V2 方案，也代表着它开始进军Uniswap 所擅长的领域。
然而，虽然双方开始在各自的强项领域开始了短兵相接，但其实两个项目的在协议的思路，以及对行业方向的判断定上大相径庭。
Uniswap VS Curve：两种产品思路
Uniswap 的思路是通过开发一套可以模拟任何形状价格曲线的通用解决方案，将各种关键参数的决定权留给用户，期待做市商在协议基础上能够通过自由的探索和竞争，最终找到属于自己的做市方案，以响应市场需求。
Curve 团队则认为用户期待更简洁的做市方案，目前阶段不应该让用户陷于复杂多样的选择困境，应当直接为用户提供自动的解决方案，使用户只需考虑做市的资金量和做市时间即可，其他全部交给Curve 协议自动完成。
对于Uniswap V3 和Curve V2 的两套方案，加密媒体区块律动这样评论道：
「承认个人与团队的意志无法永远正确，并将选择权充分的开放给市场和社区，自己仅参与底层基础架构的建设，是Uniswap 团队的核心理念。承认多数用户不具备专业分析能力，作为更专业的行业精英有必要提供一揽子解决方案，尽量解决用户可能遇到的一切障碍，是Curve V2 的核心理念。
是直接做一个功能强大的好产品，还是成为一个通用的底层架构并赋能生态发展，这是Curve 与Uniswap 两个顶级团队开发思路最重要的区别。两种不同的方法论哪一个会最终通过市场的考验，或许只有等待时间来给出答案。 “
可见，Curve 是以做应用的心态在做产品，而Uniswap 则是以生态视野看待自己的长期发展。
或许随着加密交易市场的进一步壮大， 越来越多的机构级做市商进入，Uniswap 的模式将有更大的开发潜力，而就目前的市场来说，Curve 的做市模式，更符合大多数做市用户的需求。
项目竞争优势及护城河
Curve 能在所有的Defi 协议的流动性争夺大战中稳居第二位，坐拥超过100 亿美金的TVL，是准确的产品定位、精细的机制设计以及长期的平稳运营综合作用的结果，其项目核心竞争优势在于：
通过早期聚焦稳定币和稳定对价资产的交易市场，构建了在这个细分领域的强大统治力，成为资产发行方、大额交易者以及寻求稳定收益的做市商的首选平台，形成了明显的网络效应；
拥有非常优秀的通证模型，具体体现为：
- 将平台上所有稀缺资源的分配，都与治理权深度捆绑，而治理权（veCRV）需要将代币CRV 进行锁仓才能换取，大量、长期的锁仓缩小了项目的流通市值。
- 充分引入平台各参与方（流动性提供者、资产和票据的发行方）的博弈，形成对治理权（veCRV）的持续竞逐，进一步提高了对CRV 的需求，承接了持续解锁的CRV 卖压。
- 以上两者的最终结果是：a. 稳定的币价保证了流动性提供者的APY，留住了流动性；b. 将系统的多方参与者与Curve 平台的发展深度捆绑，提高了治理的参与度和有效性；c. 为核心参与方制造了极高的转换成本，长期质押了大量CRV 的它们很难离开。
- 采用了Vyper 语言来编写代码，并申请了代码知识产权，为企图Fork Curve 的项目制造了技术和法律上的阻碍。
风险
1. 来自于Uniswap 等DEX 的挑战，导致在稳定对价资产交易市场的份额被侵蚀
Uniswap 在推出V3 后，在稳定币上的交易滑点问题已经显著改善，其核心稳定币的市场交易量也逐步赶超Curve，如果该趋势进一步扩大，会导致Curve 在稳定对价资产兑换领域的行业统治力降低，而这正是Curve 的立身之本，优秀的经济模型只是放大和巩固了它的这一优势。
2. 非稳定对价资产交易的新业务拓展不顺
Curve v2 采用的模式是否能赶超Uniswap V3，扩大其在非稳定对价资产交易的市场份额，这点有待检验。
3. 稳定币的市场份额的集中化
当稳定币市场的格局固化，几种头部稳定币确立绝对优势后，新稳定币项目不再出现，会造成Curve 的稳定币兑换产业链中的生态位弱化，无法向新的稳定币挑战者再收取目前的「垄断租」。
4. 监管风险
各国监管部门对于稳定币的监管、对于Defi 交易平台的监管，是目前Defi 面临的共同风险，但是Curve 的DAO 治理已经取代团队的中心化决策，对监管具有一定的抗性。
初步价值评估
五个核心问题
项目处在哪个经营周期？是成熟期，还是发展的早中期？
项目的PMF （Product market fit）已经得到充分验证，产品核心功能成熟，但仍处于行业和项目发展的早中期。
项目是否具备牢靠的竞争优势？这种竞争优势来自于哪里？
项目依靠准确的市场定位以及优秀的经济模型，创造出了明显的网络效应，现有核心参与者的转换成本比较高昂，具有比较充分的竞争优势。
项目中长期的投资逻辑是否清晰？是否与行业大趋势相符？
项目的中长期投资逻辑是立足于现有的稳定对价资产交易市场，逐步拓展至更广的交易领域，甚至开拓外汇等万亿级的交易市场。交易平台作为加密商业的底层协议之一，仍然有非常大的发展空间，项目发展与行业大趋势相符。
项目在运营上的主要变量因素是什么？这种因素是否容易量化和衡量？
项目的主要经营变量主要是两点：1. 能否守住立足之本：稳定对价资产的交易市场；2. 能否顺利拓展新领域：其他资产的交易市场。可以通过观察Curve 的交易金额、产品创新，以及竞争对手的业务数据来衡量。
项目的管理和治理方式是什么？DAO 水平如何？
Curve 已经完全实现DAO 治理，社区的参与度和治理水平都堪称行业标杆级水平。
估值水平
本研报将采用相对估值法对Curve 进行估值比较，包括与过往的估值进行纵向比对，以及与同类项目进行横向估值比对，得出目前市值高低估的初步结论。
纵向估值对比
在此，我采用PE 这个常见的指标来观察Curve 现有市值和过往市值的水平对比。PE= 总市值协议净收入，PE 值越高，意味着该项目越高估，Curve 的PE 对比如下：
通过对比，我们发现Curve 与今年过往相比的PE 水平处于高位，并不低估。
横向估值对比
在此，我将Curve 与Uniswap、Sushiswap 进行横向对比，考虑到Uniswap 目前没有开始征收协议费，我们采用PS 市销率（PS= 总市值协议总收入）来将这三个项目进行横向对比，同样的，PS 值越高，意味着该项目越高估：
我们发现，站在PS 角度，Curve 与Uniswap 和Sushiswap 两个项目相比，同样处于高估的位置。
估值评估
总体来看，Curve 在稳定对价资产交易领域有着明显的竞争优势，其优秀的代币经济模型进一步强化它的护城河，并为其代币价格提供了强大的支撑。
然而，无论是纵向的历史估值对比，还是横向与其他交易协议对比，现阶段Curve 的估值都显得过高了。
参考资料：
本文需要特别感谢Curve 社区的「小明同学@ 机器猫DEFI 研究院」、「wellkochi」以及知名加密KOL@ 区块先生在资料和信息分享上的大力帮助。
其他参考信息：
项目市值：
行业数据：
https://www.tokenterminal.com/
https://dune.xyz/hagaetc/dex-metrics
报道与研究报告：
头等仓：Curve 研究报告
《简明理解Curve V2 原理：它与Uniswap V3 流动性方案有何不同？ 》
《多维度解析头部AMM：Uniswap V3、Curve V2 与Balancer V2 》
《 Valuation of Curve Finance: The Most Overlooked Protocol 》
