From 2020 to 2022, the 3pool (USDT-DAI-USDC) launched by Curve helped users from three different markets solve their needs to exchange to other US dollar stablecoins.
Curve has solved the pricing problem between pegged assets through the "leveraged version of Uniswap v2". Due to demand, underlying structural differences, and liquidity, there will still be price differences in the secondary market for pegged assets, which competitors usually do not consider. After several years of operation, Curve has actually mastered the liquidity between pegged assets.
However, this does not solve the pricing problem of non-pegged assets. Curve has innovated based on stable swaps and achieved centralized liquidity based on AMMs between non-pegged assets through algorithmic automatic position transfer.
Curve will use the crvUSD system to mint other synthetic currencies, such as crvEUR, crvCNH, etc. Part of the interest income generated by the currency minting module will be allocated to the synthetic stablecoin pool
LP can obtain both transaction fee refund and lending interest income at the same time. Through this structure, LP can obtain foreign exchange market making income far better than traditional markets.
Simulation data shows that under the premise of the same trading volume, assuming the use of Uniswap v2 will generate 100% transaction slippage, if Curve stable swap is used, the transaction slippage is less than 1% (but it cannot meet the needs of foreign exchange fluctuations). Using Curve v2 Cryptoswap will generate 30% transaction slippage. If the new forex swap structure is used, the transaction slippage will be less than 2%.
This is a simulated performance based on the USD-EUR market and USD-CNY market, red means high slippage and blue means low slippage.
Additionally, when running simulations, the slippage on USD/CNY trades using forex swaps will be very low.
