Curve fi
Curve fi supports pool-based token swaps and collateralized lending
Curve fi combines liquidity pools for token swaps with markets for lending and borrowing against crypto collateral. Its exchange supports stablecoins and assets with changing relative prices. Liquidity providers earn trading fees, while lenders earn borrower interest. Separate products cover crvUSD minting, savings through scrvUSD, and governance through locked CRV.
The distinction between these activities starts with what happens to the deposited asset. A swap exchanges ownership, a liquidity deposit creates a pool share, and borrowing creates debt against collateral. Those differences determine the costs and obligations that follow.
Pool balances determine the exchange quote
A Curve swap trades against assets held in smart contracts. Available liquidity, the pool’s pricing formula, and trade size determine the output. Pool fees also affect the quote, and dynamic fees can increase when a trade worsens an imbalance.
The swap router searches across Curve pools for a route. Trading directly through a particular pool bypasses the search across pools and can change the gas cost. Compare the amount received after pool fees alongside the separate network fee. A minimum-output limit constrains how far execution may depart from the accepted quote.
Transactions and positions are public on the blockchain. A connected wallet doesn’t make trading activity private.
Liquidity deposits and gauges create different positions
Liquidity providers supply the assets that traders exchange. Their LP tokens represent a share of a particular pool, while gauge staking records a separate claim used for distributing eligible rewards.
Pool shares and trading income
Trading fees accrue to the pool position. Some pools also hold assets that generate underlying yield. The LP token represents exposure to the pool’s changing asset balances, so its value can fall even while fees accumulate. A deposit isn’t an entitlement to recover the original quantities of every token. Where an asset loses its peg, trading can leave the pool increasingly concentrated in that weaker asset.
Gauge stakes and incentives
A gauge is a contract that distributes rewards to eligible staked positions. Pools with CRV incentives generally require LP tokens to be staked in their gauge. The pool’s trading income continues within the underlying position. Incentives have separate eligibility and distribution rules; simply holding an LP token doesn’t establish entitlement to every displayed reward.
Mint markets and lending markets fund loans differently
Borrowing requires collateral that the selected market accepts. Mint markets create crvUSD against approved collateral; lending markets provide existing tokens supplied by lenders. Both leave the borrower with debt and collateral subject to the market’s rules.
Creating crvUSD against collateral
crvUSD is Curve’s crypto-collateralized stablecoin, designed to track the US dollar. A mint-market loan creates new crvUSD. The debt accrues interest, and collateral supports repayment. A swap can also acquire crvUSD without opening a loan, because buying an existing token doesn’t create borrowing obligations.
Mint markets don’t offer the same supply opportunity as lending markets. Their borrowable crvUSD comes from issuance rather than a lender-funded vault. The stablecoin’s price target doesn’t make its market price fixed.
Supplying and borrowing existing tokens
Llamalend lenders deposit a market’s borrowable asset and receive vault shares. Borrowers obtain that asset against the market’s collateral token. Borrower interest contributes to the lending return. Available funds constrain borrowing and withdrawals, while market caps can restrict new deposits or debt. A vault share therefore represents a lending position whose immediate redeemability depends on available liquidity.
Llamalend v2 supports markets without requiring crvUSD on either side. Token compatibility, collateral configuration, and active caps still constrain each market. V1 is deprecated, with its markets being phased out. The existence of a pool or token doesn’t establish that an active lending market accepts it as collateral.
LLAMMA changes collateral through a liquidation range
LLAMMA gradually converts collateral into the borrowed asset as the collateral’s price relative to the borrowed asset enters the loan’s liquidation range. This process is called soft liquidation. A price recovery can reverse the direction of conversion, but it doesn’t undo losses from earlier exchanges. Interest also increases the debt that the position must support. Hard liquidation remains possible when loan health falls below the applicable threshold. Borrowing capacity and collateral exposure can therefore change even without another action by the borrower.
Savings crvUSD earns through a separate vault
Depositing crvUSD into the savings vault on Ethereum produces scrvUSD shares. The vault receives a portion of crvUSD borrowing revenue, and accrued rewards increase the crvUSD value represented by those shares. Its deposited crvUSD remains in the vault rather than being lent onward. This differs from supplying a particular Llamalend market, where borrowers use the supplied asset. The savings return varies with revenue allocation and deposits. Holding scrvUSD still carries crvUSD price exposure and smart contract risk.
CRV locking connects voting power and reward allocation
CRV is Curve’s governance and incentive token. Locking it produces vote-escrowed CRV, or veCRV, which provides voting power. It can also provide access to protocol revenue and boost eligible CRV rewards. The amount locked and the remaining lock duration determine voting weight.
Gauge votes influence where CRV emissions go, connecting governance decisions to liquidity incentives. That doesn’t make CRV an LP token or a claim on a specific lending deposit. Governance participation, pool ownership, and lending exposure remain distinct positions, even when one wallet holds all of them.
StableSwap and CryptoSwap address different price relationships
StableSwap concentrates liquidity around the expected relationship between closely related assets. That design supports efficient exchanges near the intended ratio. It doesn’t force market prices to remain there, and a persistent depeg can cause substantial liquidity-provider losses.
CryptoSwap handles assets whose relative prices move. Its algorithms adjust liquidity concentration using price information and pool-specific rebalancing conditions. Automated management doesn’t eliminate losses relative to holding the assets separately.
Some StableSwap pools are metapools that hold another pool’s LP token. This adds exposure to the underlying pool’s assets and contracts. A metapool’s visible asset list therefore needs to be understood alongside what its LP-token component represents.
When does a swap fit better than a collateralized loan?
A swap fits an outright exchange when the required output is available and no continuing debt is acceptable. Borrowing fits a different purpose: obtaining an asset while maintaining a collateral-backed position that requires repayment and monitoring.
Consider a hypothetical case with a token balance, a supported swap, and an active lending market accepting that token as collateral. The desired outcome is at least 1,273 units of the destination token, with no loan remaining. These assumed conditions and amounts illustrate the choice; they aren’t a live quote or a particular market.
The borrowing route fails the no-debt requirement even if it could deliver enough tokens. For the swap, the transaction’s minimum output must cover the required 1,273 units before submission. Assume the selected quote supports that minimum and network fees are funded separately.
The confirmed swap delivers 1,281 units, exceeding the requirement by 8 units. The destination balance has increased, the exchanged input has left the wallet, and no borrowing position was opened. An output below the configured minimum would cause the swap to revert.
If retaining exposure to the starting asset becomes the priority, a loan deserves a separate assessment of collateral eligibility, interest, and liquidation exposure.
Everyday questions about Curve fi
Do I need CRV to swap tokens on Curve?
CRV isn’t a general requirement for swapping tokens on Curve. The trade needs the input asset and sufficient funds for the network’s transaction fee. Holding CRV or locking it for veCRV serves governance and incentive purposes; it doesn’t replace the tokens that a swap spends.
What does a token approval authorize?
A token approval allows a specified contract to spend that token within its allowance. It doesn’t itself complete a swap or create a deposit. The token, spender, and approved amount determine the permission granted. An existing allowance may cover a later transaction, so approval requirements depend on the token and contract involved.
Where are my LP tokens after gauge staking?
Staked LP tokens are held by the gauge, which records your staked position. They may therefore disappear from the wallet’s ordinary token balance without the pool position being withdrawn. The relevant balance is the gauge stake for that wallet. Unstaking releases the LP tokens; withdrawing liquidity is a separate operation.
Can locked CRV be withdrawn before the lock expires?
The standard veCRV lock doesn’t permit early withdrawal of the locked CRV. The tokens become withdrawable after the lock expires, and veCRV itself isn’t transferable. A longer lock changes the commitment as well as the voting weight, so locking shouldn’t be treated like keeping freely spendable CRV in a wallet.
Is underlying token yield additional to the displayed pool yield?
Underlying token yield may already be included in the pool’s displayed base yield. Curve’s base vAPY combines trading fees with applicable underlying yield, while CRV incentives appear separately. Adding the same underlying return again would double-count it. A recent annualized figure also doesn’t establish what the position will earn over a full year.
Does selecting another network move my Curve assets?
Changing the selected network doesn’t transfer assets between blockchains. Wallet balances and Curve positions belong to their respective networks, with separate contract deployments. Moving an asset requires a supported transfer mechanism, where available. A matching ticker on another network doesn’t by itself establish that the token or position is interchangeable.
How can a lending balance remain visible when withdrawal is limited?
A lending share balance represents a claim on market assets, including funds currently borrowed. It doesn’t mean the entire balance is immediately available for withdrawal. Limited unborrowed liquidity can restrict redemption, and bad debt can impair recovery. The displayed position value and the amount currently withdrawable answer different questions.