Dec 2, 2024: Our weekly Institutional Insights explores the latest market developments — market performance, industry news, exchange-traded fund (ETF) flows, trending topics, upcoming events and token unlocks — to help you supercharge your crypto trading.

 explores the latest market developments — market performance, industry news, exchange-traded fund (ETF) flows, trending topics, upcoming events and token unlocks — to help you supercharge your crypto trading.

Weekly Highlight — U.S. Economy Growth Driven by Improved Productivity

If U.S. economic growth is strong, why is the Federal Reserve considering interest rate cuts? This question was recently posed to Fed Chair Jerome Powell. Instead of focusing solely on the Fed's actions, we should explore the reasons behind the robust growth, and see how it can be sustained.

Real GDP is expected to exceed pre-pandemic levels for the second consecutive year. Typically, strong growth raises concerns about overheating, but inflation has actually fallen. Recent growth is largely due to increased productivity and a growing workforce, which are not inflationary and can help rebalance supply and demand.

A significant factor behind this success is the rise in labor productivity, averaging 2.3% over the past two years — faster than the four years before the pandemic. This uptick is linked to a surge in new business applications, especially in the tech sector, as the pandemic's economic shifts and relief measures lowered barriers to entrepreneurship, particularly benefiting underrepresented groups.

The boost in productivity also reflects workers moving to roles better suited to their skills, a trend accelerated by the 

. This mobility has been essential for productivity gains, as higher job turnover correlates with increased business dynamism.

However, sustaining higher productivity is a challenge. The Fed must avoid overly restricting the economy, as high interest rates can deter investment in technology. Additionally, a gradual cooling of the labor market, with declining job quits, is concerning.

For policymakers, monitoring labor market dynamics and business formation is crucial. If these indicators decline, productivity and growth could wane. The U.S. economy has made significant progress, and maintaining this momentum is essential.

Weekly Crypto Highlight — Sui Is Poised for Growth

Bybit has released the Sui ecosystem report, with its key takeaways below. (Read the full report 

: Sui has achieved impressive performance, processing over 297,000 transactions per second (TPS) while maintaining low latency. This positions it among the fastest blockchains available.

: In 2024, Sui's market capitalization skyrocketed over 1,000%, reaching $9.5 billion and reflecting strong investor confidence and growing adoption.

: The total value locked (TVL) in Sui’s DeFi ecosystem has surpassed $1.5 billion, ranking it 11th among major blockchain networks and highlighting its rapid growth in 

: The launch of the Grayscale Sui Trust has significantly increased institutional interest, resulting in an 89% price surge for the SUI token in Q3 2024, indicating its appeal to accredited investors.

: Sui is making strides in the gaming sector, introducing the SuiPlay0X1 handheld gaming device and various 

, enhancing user engagement and expanding its ecosystem.

Developed by Mysten Labs, Sui is a Layer 1 

 (PoS) blockchain launched on May 3, 2023. Its object-centric data model allows for parallel transaction processing, enhancing throughput and reducing latency. Its use of the Move programming language ensures resource safety through rigorous bytecode verification, mitigating common blockchain vulnerabilities.

: Partnerships with firms like Copper and Zero Hash strengthen Sui’s infrastructure and credibility in the financial sector, enhancing its offerings in digital asset custody and transaction facilitation.

: Sui’s DeFi sector is thriving, with leading protocols like 

 offering diverse financial services. In gaming, initiatives such as the SuiPlay0X1 device and various web3 projects bolster user engagement.

In summary, Sui is poised for continued growth, driven by technological innovations that are expanding its presence in both DeFi and gaming.

Advanced

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Weekly Institutional Insights: Sui Poised for Growth; U.S. Economy Driven by Productivity Growth

Chill Guy is a viral meme illustration that took social media by storm before a crypto project used the meme to launch a Solana-based token. Learn more here.

What started as a simple illustration of a laid-back dog has become a global meme sensation, with the cartoon character known as Chill Guy dominating both social media trends and cryptocurrency markets. Created by artist Phillip Banks in October 2023, the easygoing canine character sparked a viral movement that has attracted major brands worldwide.

This article follows Chill Guy’s transformation from a social media sensation to a cryptocurrency asset. We'll examine its viral beginnings, community growth, market impact and what potential investors can expect from CHILLGUY in the future.

 is a viral meme illustration by artist Phillip Banks, depicting a laid-back dog in casual clothes whose easygoing attitude took social media by storm before a crypto project used the meme to launch Just a Chill Guy as a Solana-based token.

What Does Just a Chill Guy Aim to Achieve?

The CHILLGUY meme coin aims to spread a "Why worry?" philosophy into cryptocurrency markets by embracing the laid-back, stress-free attitude that made the original meme go viral. The project transforms this easygoing vibe into a community-driven token, where being low-key isn't just a catchphrase — it's a shared mindset among holders.

The CHILLGUY community brings this philosophy to life by sharing endless variations of the CHILLGUY meme across social platforms. Through market swings and viral trends, CHILLGUY keeps his iconic pose: hands in pockets, subtle smirk, perpetually relaxed.

Just a Chill Guy (CHILLGUY) operates as a Solana Program Library (SPL) token on the 

 blockchain, leveraging the network's ultrafast speeds and low costs to ensure smooth trading. The token was created using Pump.fun, a specialized platform that lets users launch Solana-based tokens without any fees, removing traditional barriers to token creation.

CHILLGUY is a community takeover (CTO), meaning it's completely owned and directed by its token holders with no central team in control. This decentralized structure ensures the project stays true to its community-driven nature, its holders collectively guiding its future while embodying the laid-back spirit of the original meme.

The CHILLGUY token launched with a maximum supply of 1 billion tokens, of which 999,965,435 are currently in circulation. This near-complete distribution of tokens to the market supports active trading and community participation.

What makes CHILLGUY's tokenomics particularly notable is its widespread distribution across more than 142,000 unique holders (as of Nov 27, 2024), achieved in just 12 days. This rapid expansion of its holder base demonstrates strong community adoption and aligns with the project's decentralized, community-driven principles.

CHILLGUY has exploded across social media, especially on TikTok, where the meme has amassed hundreds of millions of views. Its laid-back character resonates with users worldwide, inspiring countless creative adaptations.

Major brands worldwide have embraced CHILLGUY in their marketing campaigns. From Sprite Europe to NFL on CBS, the character has resonated across mainstream media, even catching the attention of global figures like El Salvador's president Nayib Bukele.

The “Chill Guy” meme’s influence spans multiple social media platforms, with a growing community of followers: 96.6K on X (

). On the other hand, the meme token itself also has a vast community, with 39.9K on X (

) and an active Telegram channel of over 15,000 members. These numbers reflect the meme's ability to engage audiences across different platforms.

The token's popularity in cryptocurrency markets matches its social media success, with CHILLGUY maintaining a substantial 24-hour trading volume of over $330.03M as of Nov 27, 2024. This high trading activity demonstrates the strong market interest in CHILLGUY beyond its meme status.

Looking to trade Just a Chill Guy tokens? Bybit now offers the CHILLGUY/USDT Spot trading pair and CHILLGUYUSDT Perpetual contract. To get started, you’ll first need to create a Bybit account, then fund it with cryptocurrency and navigate to the 

While CHILLGUY has maintained strong trading volumes and continues gaining mainstream attention through its viral social media presence, investors should carefully weigh its strengths and risk factors before making investment decisions.

With its widespread brand adoption, sustained trading activity and explosive community growth of over 142,000 holders, CHILLGUY demonstrates significant market potential. However, meme coins are inherently volatile. Potential investors should 

 and invest no more than they can afford to lose.

CHILLGUY is the latest viral sensation to harness the power of the attention economy to convert social media momentum into crypto market success. While CHILLGUY has already demonstrated its ability to capture mass appeal, its position as a leading meme token will depend upon how effectively it maintains its cultural relevance and community engagement in this fast-moving market.

Intermediate

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Just a Chill Guy (CHILLGUY): Embracing the Art of Nonchalance

Zircuit (ZRC) combines optimistic and ZK rollups with AI-driven security, offering fast, low-cost Ethereum Layer 2 solutions. 

 network has flourished, mainly due to the ongoing network congestion, high fees and poor scalability of the latter. Many of these platforms use rollup technology, whereby batches of multiple transactions processed off-chain are bundled together and posted in bulk to the underlying Layer 1. Ethereum-linked rollups mainly come in two varieties 

 (ZK). While optimistic rollups boast lower computational overhead, the ZK variety of these networks features a higher degree of security.

Zircuit (ZRC) is a Layer 2 chain that adopts a hybrid approach, combining the elements of optimistic and 

. This lets the platform offer the performance benefits of optimistic technology along with the security of ZK validity proofs. To further enhance overall security, Zircuit uses a unique 

 (AI)–driven system of monitoring for malicious transactions.

 (ZRC) is a hybrid Layer 2 blockchain that combines the features of optimistic and ZK rollups, and uses AI-driven monitoring for potentially harmful transactions. 

 rollup development technology, a popular framework for building optimistic rollup networks. Additionally, it uses zero-knowledge proofs, which lets the platform offer the best of both worlds 

 the performance benefits of optimistic rollups and the security of ZK technology. Zircuit is 

The Zircuit project takes security very seriously, and has introduced a unique system of AI-based protection against malicious transactions at the sequencer node level. The use of ZK proofs and an AI-based protection system make Zircuit one of the most secure platforms in the competitive world of Ethereum Layer 2 chains.

Along with its excellent security benefits, Zircuit also boasts low costs, fast transactions, excellent scalability and 2-second block production intervals. All these features make it an ideal environment for 

 (DApps) in various niches, particularly 

 (DeFi). In fact, the leading protocols within the Zircuit ecosystem are all dedicated to the finance niche, with Zircuit Staking being the largest application by TVL.

With its heavy focus on DeFi, Zircuit aims to become a leading liquidity hub for various token types within the sector, including 

. These assets can be staked through the Zircuit staking program — supported by the platform's Liquidity Hub — to earn staking APRs, airdrop rewards and points based on the Zircuit Point program (covered further in our article).

The platform also operates a secure native bridging solution, 

, to help users transfer assets between its Layer 2 network and Ethereum Layer 1.

The company behind the project, Zircuit Ltd., was founded in 2021 in Canada by Dr. Martin Derka, Jan Gorzny and Angel Xu. Zircuit's testnet was launched in November 2023, but made headlines in April 2024 when the project reported that its 

 (TVL) had soared past $2 billion. While testnet TVLs are more a gauge of future potential for a blockchain than an indicator of its existing worth, the news attracted the attention of industry observers toward the platform. Following its highly publicized testnet success, Zircuit launched the first phase of its mainnet in August 2024. This was followed by the launch of the platform's native token, ZRC, in November 2024.

As a typical rollup, Zircuit uses an off-chain sequencer node to batch and organize Layer 2 transactions for subsequent posting to the underlying Ethereum Layer 1. The batches have ZK validity proofs attached to them to signal to Layer 1 validators that they’re free from fraudulent transactions. Zircuit's architecture also includes prover nodes, whose job is to produce these validity proofs.

However, unlike other rollups using ZK proofs (also known as validity proofs), Zircuit doesn't generate validity proofs for every block of transactions. Instead, some blocks have pre-generated template proofs, while others go through the process of having a dedicated validity proof created for them. After a few blocks featuring validity proofs, there are several more that utilize template proofs. The image below illustrates this approach.

The key reason Zircuit has adopted this form of proof design is that the process of generating ZK proofs is computationally intensive. By using template proofs for some of the blocks in a sequence, Zircuit can reduce the overall computational overhead. However, the project’s team has stated that the template proof model is temporary, and will be phased out in the future. At that stage, the platform will move to generating ZK proofs for each block.

Zircuit features a highly modular design whereby provers — responsible for generating validity proofs on the platform — can easily be plugged into or removed from the network. This modular approach is distinct from the standard ZK rollup design, in which provers are more tightly and less flexibly integrated into the overall architecture.

As noted earlier, Zircuit uses a dedicated sequencer to organize and batch transactions into blocks. The platform also applies AI-driven monitoring at the sequencer level (the Sequencer Level Security, or SLS) to spot and exclude fraudulent transactions before they’re finalized on Layer 2.

When transactions are first posted to Zircuit, they enter the 

 — a temporary area from which the sequencer picks and organizes individual transactions into blocks. The mempool is being monitored at all times, using AI algorithms to identify suspicious transactions. If a transaction in the mempool raises a flag, it's quarantined and assessed for validity before the sequencer can include it in a block. The image below shows how this process works.

One of the distinct features of Zircuit is its hybrid architecture, which combines the properties of optimistic and ZK rollups. At the base level, Zircuit is built using Optimism's Bedrock development framework, a technology popular for optimistic rollup networks. However, the use of ZK proofs — or, to be more precise, a combination of validity proofs and template proofs — ensures that Zircuit enjoys a security level that standard optimistic rollups normally can't match.

The use of AI-based SLS provides robust security to Zircuit, complementing the already highly secure ZK proof system. Very few Layer 2 networks in the industry currently feature anything similar, making the platform a true pioneer of AI use for sequencer-level operations.

Like any rollup based on Optimism Bedrock, Zircuit enjoys EVM compatibility. This allows for smooth interoperability with the underlying Ethereum Layer 1. EVM compatibility also makes it easy for developers familiar with Ethereum’s environment to develop Zircuit-based DApps, or to port existing Ethereum applications to the platform. Developers can take advantage of technologies commonly used for Ethereum (e.g., the Solidity programming language and the Hardhat development framework) to build Zircuit applications and smart contracts.

Zircuit Bridge is a native bridging solution designed to easily transfer tokens between Ethereum and Zircuit. It boasts high security, low transaction fees and fast transfers, and allows users to move a variety of cryptocurrencies between Ethereum and Zircuit, including ETH, 

) and LRTs like Super Symbiotic LRT (weETHs). As of late November 2024, the total number of cryptos supported by the bridge is close to 30.

Zircuit has launched a reward program called Zircuit Points. Users can earn these Points by staking supported assets, and by participating in the Build to Earn initiative (more on this below). Accumulated points will be converted to ZRC tokens in the future. Points also create the opportunity to qualify for token airdrops.

The primary way for most users to earn Zircuit points is via 

. The Zircuit Staking program lets you stake LSTs, LRTs, popular stablecoins, some wrapped tokens and Ether (ETH) to earn points. Using LSTs and LRTs, you can earn yields (along with native Zircuit staking APRs and Points) from the respective staking and restaking platforms that issue these assets.

Zircuit Points earned via staking have different multipliers, depending upon the asset. For example, Ether has a multiplier of 0.5, while LSTs, LRTs and stablecoins have a multiplier of 1. Multipliers for different LST and LRT assets may be subject to change in the future.

Build to Earn is another way to qualify for Zircuit Points. The program allows developers to contribute to the Zircuit ecosystem and earn Points in a number of ways, including:

Launched in November 2024, ZRC is the platform's native cryptocurrency. It's an 

 asset deployed on both Zircuit and Ethereum Layer 1. ZRC is mainly used for reward distributions, and participation in token airdrops for ecosystem DApps. Currently, transaction fees on the network are paid in Ether. It's possible that, in the future, ZRC might be used for some transaction fee payments.

ZRC is also used for rewards under the Gas Rebate program. As users conduct transactions on the platform, they 

. Zircuit’s Gas Rebate program provides rebates to offset some of the incurred fees. The amount of ZRC earned as a rebate is proportional to the amount spent on gas in ETH; the project's documentation states that for each ETH spent on gas, the user earns 125% in ZRC. All kinds of gas fee payments qualify for the rebate, including ordinary asset transfers and transactions involving interaction with Zircuit DApps.

ZRC is a supply-capped token, with a maximum and total supply of 10 billion. The token's supply allocation shares are as follows:

The ZRC token is available on Bybit's Spot market as a swap pair with USDT (

 to grab a share of the 5 million ZRC prize pool. New users who sign up for a Bybit account and complete identity verification can earn ZRC rewards by accumulating a deposit volume of at least 2,000 ZRC, or by depositing 100 USDT and trading 100 USDT worth of ZRC via their first trade with Bybit. 

Meanwhile, existing users can qualify for ZRC rewards by trading at least 500 USDT worth of ZRC on the Bybit Spot market, with the possibility of earning up to 10,000 ZRC based on trading volume. The 

 event will run through Dec 10, 2024, 8:59AM UTC.

Zircuit is among the pioneering Layer 2 platforms to adopt a hybrid design for a rollup network. Thanks to the platform's architecture, users can take advantage of low transaction costs, fast transfers and great scalability while enjoying the benefits of high security delivered by ZK proofs and AI-driven mempool monitoring. AI-based monitoring for fraudulent transactions is a particularly notable feature of the platform and is undoubtedly among the most advanced technologies employed in the blockchain industry.

User security combined with faster and cheaper transactions for the Ethereum network — all in one package — is now feasible, thanks to Zircuit's innovative technology and unique approach!

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What Is Zircuit (ZRC): Where Performance Meets Cutting-Edge Security

Bybit is celebrating its sixth anniversary with the #Super6Bybit event, offering a $1.2 million prize pool and focusing on its bbSOL token.

Daily Top Performer — Virtuals Protocol (VIRTUAL)

On Wednesday, the S&P 500 fell 0.38% as tech stocks dropped and inflation data reinforced a hawkish Fed outlook. Coindesk Indices, an index measuring broader cryptocurrency market performance was down by 0.40%, with Bitcoin and Ether dropping by 1.86% and 1.79%, respectively in the past 24 hours.

Today's top performer is VIRTUAL, which surged 53.6% following the launch of the $MUSIC token by Agentstarter, featuring AI-driven music video capabilities and community-focused tokenomics.

Virtuals Protocol (VIRTUAL), founded in 2021, allows users to invest in and co-own AI-driven virtual assets like companions and influencers. Its model fosters community ownership, transforming AI agents into revenue-generating assets across platforms like Roblox and TikTok. The platform attracts contributors from AI and gaming to drive innovation in virtual economies. 

, using AI to create music videos and offering features like animated videos, voice mimicry, and karaoke tracks. The tokenomics allocate 60% for airdrops, 20% for liquidity, and 10% each for the development team and Virtuals Protocol.

Check Out the Latest Prices, Charts, and Data of 

Bybit is celebrating its sixth anniversary with the 

, offering a $1.2 million prize pool and focusing on its bbSOL token. Launched in September 2024, bbSOL is the first exchange-backed Liquid Staking Token on Solana, providing liquidity and staking rewards. The campaign, running from November 28, 2024, to January 6, 2025, invites participants to build, transform, and supercharge their bbSOL through tasks, leaderboards, and community milestones, increasing rewards. The event combines gaming mechanics, community engagement, and opportunities to win prizes while promoting innovation and growth in the crypto space.

Yesterday, there were no flows in BTC Spot ETFs, including GBTC and non-GBTC categories.

. Stake BNB on Lista's portal to get slisBNB, then deposit it into Astherus to earn airdrop points with multipliers (3X for Lista, 1.15X for Astherus). No lockup is required, and slisBNB is the most efficient option.

Beginner

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Bybit Celebrates 6th Anniversary with $1.2M Prize Pool and bbSOL Supercharging Campaign

Crypto

DeFi

web3

Curve Finance is a DEX primarily for users to swap tokens for stablecoins. Users can also provide liquidity to earn fees. Learn how it works.

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 like Curve Finance. and Uniswap. Primarily a decentralized liquidity aggregator, Curve Finance allows users to swap tokens for stablecoins and to provide liquidity to the liquidity pools and earn fees.

On contrary to Uniswap, Curve Finance aims to provide users an alternative to swapping tokens faster, more direct, and at a cheaper rate. Instead of swapping token A for ETH, then ETH to token B, the use of Curve Finance eliminates the hefty transaction fees and processes swapping token A to B directly in a single transaction.

 is an Automated Market Maker (AMM)-based decentralized exchange (

. It’s focused on swapping between different stablecoins, and it features low fees and minimal slippage. Since AMMs work with a pricing algorithm instead of an order book, Curve Finance is also useful for swapping between tokens that remain in a similar price range, like different tokenized versions of Bitcoin such as 

As of June 2021, there are 39 active pools available for swapping between stablecoins and assets on the platform. However, these pools are subject to changes based on the market demand. Some of the stablecoins available include USDT, USDC, DAI, BUSD, TUSD and sUSD. One of the known stablecoin pools is 3CRV, which consists of DAI, USDT and 

Curve Finance also supports yield-bearing tokens like those from 

, with yUSD pools consisting of yDAI, yUSDT, yUSDC and yTUSD. Users that participate in this pool receive the swap/gas fees generated by the Curve pool, as well as the yield from the underlying yield-bearing tokens. 

There are pools within the platform in which liquidity providers receive a percentage of the exchange fees, while there are also lending pools that include separate DeFi protocols that offer a higher rate of interest to providers. Curve is moving toward decentralized governance by launching a Decentralized Autonomous Organization (

) in which the Curve DAO is controlled by the CRV token for voting rights.

 (AMM) is a type of decentralized exchange (DEX) protocol that depends on a mathematical formula for pricing assets. Instead of using an order book, assets are priced according to a pricing algorithm. This allows digital assets to be traded using liquidity pools, instead of having buyers and sellers.

Think of AMMs as peer-to-contract (P2C), in that there’s no need for counterparties since trades happen between users and contracts. Liquidity pools are actual shared funds made of digital tokens that are locked in smart contracts. Users supply liquidity pools with tokens, and the prices of the tokens in the pool are determined by a formula. Thus, by adjusting the formula, liquidity pools are optimized.

 becomes a liquidity provider by supplying tokens to an AMM’s liquidity pool. Liquidity providers earn a fee for providing tokens to the pool. This fee is paid by traders when interacting with the liquidity pool.

Assets are priced according to a formula which is designed for swaps in a similar range. Let’s say for example that 10 USDT should equal 10 USDC, which should equal 10 BUSD. If you convert 5 million dollars worth of USDT to USDC and then convert it to BUSD, there will be slippage. However, Curve’s formula aims to minimize this slippage, even when converting large amounts. 

In addition, the liquidity pools help to guarantee the lowest amount of slippage when exchanging digital currencies. By focusing on 

, Curve guarantees a lending protocol that is less volatile while still giving high interest on the liquidity provided.

The pools are controlled by the AMM, which rebalances pools after exchanges are made. For instance, let’s say that a pool contains USDC and TUSD. A trader at Curve Finance wants to sell USDC and uses this liquidity pool. The pool becomes unbalanced because there is now more USDC. In order to rebalance it, the price of USDC drops to encourage traders to buy USDC with TUSD. Arbitrage traders then buy TUSD with USDC. In this way, the liquidity pool rebalances the ratio of USDC to TUSD. The price incentive keeps the liquidity pools balanced.

Curve is known as an AMM exchange with low fees for traders, while also providing efficient fiat savings accounts for liquidity providers. By focusing on stablecoins, Curve allows investors to avoid volatile cryptoassets while still earning high-interest rates from lending protocols. At the same time, its model is considered conservative because it avoids volatility and speculation in favor of stability. Curve’s liquidity pools are permanently trying to buy low and sell high. 

 or Balancer, liquidity pools are made up of any token and volatility is high. By limiting the pools and the types of assets in each pool, Curve minimizes impermanent loss. This occurs when liquidity providers suffer a reduction in token value, relative to the market value of that token, from volatility in a liquidity pool.

Curve attracts liquidity providers using what’s called DeFi composability. This simply means that you can use what you’ve invested on Curve’s platform to earn rewards elsewhere in the DeFi ecosystem. Curve’s liquidity pools also contain tokenized versions of Bitcoin, such as wBTC and renBTC, which can be in the same pool, whereas wBTC and USDC cannot function together.

Since trading fees on Curve are lower than those on Uniswap, you can also earn rewards from outside of Curve with so-called interoperable tokens. Let’s say that DAI is lent out on 

, and then exchanged for a liquidity token called cDAI. Curve users can use cDAI in its liquidity pools, thus achieving another level of utility and potential earning.

The possibility of using Compound’s cTokens on Curve Finance demonstrates the composability benefits in the DeFi ecosystem. As mentioned before, Curve is also integrated with Yearn and 

 to maximize incentives for liquidity providers (LPs). Curve is unique for stablecoin trades because its liquidity and unique automated market maker attract high trading volume. Every trade earns a 0.04% trading fee paid to LPs. However, there are other ways (below) to profit from providing liquidity to Curve.

 Every trade conducted through the pools where you are a LP earns profits paid in proportion to your share of the pool. 

 Deposits in liquidity pools that aren’t utilized are deposited into other DeFi protocols to generate additional revenue.

 for stablecoin deposits on Curve are high because Curve also yields farms with pooled assets. 

 Locking CRV tokens converts them into veCRV, which is used to boost your deposit APY. 

 For additional liquidity, some pools offer incentives, such as high yields for LPs. Curve Finance is well-known for the 

 of stablecoins. As a liquidity provider, you can mix and match any of the income streams mentioned above to maximize your yields. 

CRV is Curve Finance’s native token. It is mainly used for governance, LP rewards, boosting yields (such as veCRV), and token burns. Since Curve is community-governed, its decisions are made by CRV holders who vote-lock their tokens to convert them into veCRV. Incidentally, veCRV stands for 

, meaning CRV that’s been locked into the Curve protocol for a defined time. The longer you lock CRV, the more veCRV you receive.

Keep in mind that veCRV holders earn profits from exchange fees. Curve’s protocol can be complex. Consequently, veCRV adoption is low, but increasing as yield farmers begin to understand its potential. 

Liquidity pool rewards and incentives are paid in CRV to LPs based on the size of their poolshare. Because not all trading fees are redirected to LPs, a small portion is collected and used to buy and burn CRV, reducing CRV supply.

The CRV token can be bought as well as earned through yield farming when you deposit assets into a liquidity pool and earn tokens as a reward. By providing DAI to a designated Curve liquidity pool, you can also earn CRV tokens on top of fees and interest. Yield farming the CRV token increases the incentive to become a Curve liquidity provider because you gain a financial asset and ownership of a DeFi protocol.

Curve Finance vs. Uniswap: The Differences 

The main difference between the two is that on Uniswap you can swap any ERC-20 token, whereas Curve is specifically for trading stablecoins on Ethereum. Curve is an AMM platform with many similarities to Uniswap. However, Curve differentiates itself by only accommodating liquidity pools made up of similarly behaving assets. These can be stablecoins or wrapped versions of similar assets, such as wBTC and tBTC. This allows Curve to use efficient algorithms and to display the lowest levels of fees, slippage, and impermanent loss of any decentralized exchange (DEX) on Ethereum.

Uniswap is ranked below Curve Finance in terms of TVL (Total Value Locked), which is an estimate of the potential of a DeFi yield farming platform. This indicator tells you the amount of digital currency locked and serves as a health measure for the DeFi ecosystems and yield farming market.

, Curve now has nearly $7.5 billion worth of liquidity locked in, while Uniswap has only $6 billion. The reason Curve keeps adding TVL is its focus on swapping stablecoins, a niche with less competition. Being a purpose-built market also means that Curve offers advantages to both traders and liquidity providers:

 Whale traders and high-volume trading pairs are subject to slippage, but Curve’s similar asset pools minimize it. 

 Liquidity providers on Curve supply stablecoin pairs that nearly eliminate impermanent loss.

Uniswap trades against ETH. In order to accomplish as direct a trade as possible, you need to either trade using ETH, or trade for ETH. If you trade from USDT to USDC, Uniswap turns your USDT into ETH, then trades ETH for USDC. Your swap then requires two trades, making it more expensive. Obviously, trading stablecoins on Curve is cheaper because Curve doesn’t require ETH as a base pair for trades. 

When the cryptocurrency market dips, Curve retains TVL, whereas other exchanges lose theirs. This is due to the way Curve protects liquidity providers from impermanent loss. Impermanent losses are LP profits lost when crypto price volatility unfavorably rebalances the pair assets. Since all liquidity pools require you to deposit a pair of assets, the risk increases when one of them rises or falls faster than the other. Ideally speaking, you should maintain an even 50/50 value balanced between your pooled assets.

Curve uses stable pools to walk around the impermanent loss problem. All Curve pools are either 1:1 stablecoin pools (i.e., USDT/DAI) or 1:1 synthetic token/token pools (i.e., sETH/ETH). In keeping liquidity pool pairs restricted to assets that reflect one another in value, the impermanent loss is not an issue. This makes Curve a safe haven for liquidity providers.

Overall, Curve is better than Uniswap for trading stablecoins, and it’s also a safer place to place your stablecoins, ETH and wrapped Bitcoin for steady yield income.

It should be noted that Curve Finance and other DeFi protocols are currently in the experimental phase, and are thus works in progress. Funds deposited into Curve Finance or other DeFi protocols are at risk of smart contract vulnerabilities, malicious developers, and hacks. Risks are always present with digital currencies. Evaluate these risks before entering into a new protocol or purchasing any cryptocurrency. As always, only invest what you are willing to lose. Although Curve Finance has been 

, the protocol is not exempt from risk or failure.

Curve Finance is mainly built on stablecoin pools, and stablecoins are pegged to an underlying asset. If a peg fails on a stablecoin, resulting in falling prices, liquidity providers of that pool will only hold the unpegged stablecoins. Curve supplies liquidity to other partners such as yearn.finance and Compound.

This practice, known as composability, achieves higher returns for liquidity providers. However, with this interaction comes a risk of chain collapse. Any problem with a connected DeFi protocol or partner could result in damage to Curve Finance.

Curve is one of the most popular platforms on DeFi because it favors stability and composability over volatility and speculation. However, their best reason to stay is that there is no other DeFi protocol that is so deeply interconnected with the entire DeFi ecosystem as Curve. Ethereum-based DeFi apps and protocols which are able to natively plug and play with each other are called money legos. Like these money legos, Curve and other DeFi protocols connect with each other to build financial structures so that the whole is greater than the sum of its parts. 

DeFi applications like Yearn, Compound, 

 all use Curve pools. The volume of liquidity coming into Curve from these sources drives Curve’s overall TVL and puts pressure on the CRV 

For instance, as part of their automated farming strategy, Yearn offers high-APY stablecoin vaults that deposit tokens into CRV pools. To increase returns to vault holders, Yearn buys CRV and automatically escrow-locks it into veCRV for a maximum of four years to gain an APY boost. Indeed, CRV tokenomics appear to have been created with a higher level of perfection. A nexus of incentives and rewards around stablecoin pool yields turn protocols like Synthetix into CRV holders, along with retail farmers looking for the best yields for stablecoin deposits.

What Is Curve Finance and Liquidity Pool in DeFi?

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