Ethereum’s decentralized exchanges, or DEXs, are currently booming like never before. Monthly DEX volumes hit a new all-time high above $4 billion in July 2020, and the month also saw a new record DEX-to-centralized exchange volume ratio of ~4% achieved.
That said, DEXs are having a breakout year and the era of their prominence has effectively begun. In this advance forward, DEX projects like the general-purpose token trading protocol Uniswap have become some of Ethereum’s brightest early stars.
Yet there can be specialized DEXs, too. The most exciting effort in that arena right now is Curve, a DEX liquidity pool protocol that allows for extremely efficient trading of stablecoins like USDC, USDT, Dai, and beyond.
Moreover, not only is Curve already one of the most exciting projects in the Ethereum ecosystem, but the pieces are falling into place for Curve to finish out 2020 in very strong fashion, too. In today’s post, let’s explore the growth of this stablecoin DEX, how it works, and where it’s heading from here.
The Rise of Curve
Curve’s creators started work on the exchange last fall, put out an inaugural release in December 2019. One month later, the DEX hit the limelight of Ethereum’s decentralized finance sector, and the project’s been on the rise ever since.
For instance, at the start of February 2020 Curve had around $1 million worth of assets under management and was facilitating ~$10 million in weekly volume. Fast forward just five months later, and Curve now boasts $255 million worth of assets under management and weekly volume upwards of $400 million.
That’s explosive growth in a very short amount of time. Yet it’s come because Curve is excellent at its bread and butter: extremely efficient, low-slippage, and low-fee trading.
How It Works
Curve employs an automated market maker (AMM) model. This means as opposed to an order-book system where buyers’ and sellers’ orders are matched, Curve uses an on-chain liquidity pool that ensures…