The Governance Token Curve is Built around A Huge Bribe Culture

Curve

Curve

Curve wars: Token bribes are growing in popularity within the Defi space

A curve is software that uses multiple cryptocurrencies to operate an automated market-making service focused on stable coins. It is an Ethereum token that powers Curve.fi, a decentralized exchange, and an automated market maker protocol. And it is one of the lesser-known players outside of the crypto market. It is the biggest source of liquidity for many cryptocurrencies. The curve is a key player that new tokens rely on for growth but is also central to stable swaps trading pairs of stable coins that account for a large swath of crypto trading.

It holds an outsized influence in the industry and operates through a wild seeming system of bribes where new decentralized finance protocols compete to become the next big token. The protocol is designed to make it easy to swap between ERC-20 tokens, such as stable coins and Ethereum-based Bitcoin tokens. Where Wall Street has its market makers and banks, cryptocurrency has services like Curve that provide liquidity for tokens. It’s an essential part of any financial market.

 

The financial politics of Curve bribes:

One of a number of emerging Defi protocols built on Ethereum, Curve facilitates trading not using a central order book, but rather pools of cryptocurrencies provided by users, who in turn can earn fees through their deposits. Unlike its traditional-finance predecessors, Curve is decentralized and ostensibly overseen by holders of governance tokens, a specific kind of cryptocurrency analogous to shares in a company.

Andre Cronje, the creator of Yearn Finance and a ton of other Defi projects, built a platform to execute this exact kind of bribe. Called bribe.crv.finance. The website is essentially a portal to all things CRV bribes. It lets bribers create offers, and bribees claim offers. But since this idea is already well known, there are already multiple Defi bribe platforms.

Understanding the financial politics of Curve bribes in turn gives insight into the stablecoin market, a part of crypto that has drawn increasing scrutiny of late. Terra’s UST and staked ether, or stETH, have had liquidity problems with major reverberations throughout the industry with Curve playing a major role in both.

The curve is a decentralized exchange like Uniswap, operating on the blockchain and overseen by a DAO. Curve DAO is the governance token for CURVE Finance which is a decentralized exchange for stablecoins. Its primary goal is to swap assets that have the same value which can be useful for the Defi ecosystem. This is particularly important for stable coins because traders want very little deviation from the $1 price.

The Curve war is leading to increased buying pressure for $CRV. One successful Curve Wars protocol is Convex, which started offering its own CVX token to CRV holders in exchange for letting Convex decide where to allocate Curve votes. Additionally, users who lock up Curve receive trading fees from the automated market maker, governance rights, and boosted rewards.  Curve, though ostensibly decentralized, has become a single point of failure with little backup, as the UST episode showed.

Reendex

Must see news