Curve Finance is a decentralized exchange that focuses on trading similarly priced assets like stablecoins with low fees and minimal slippage. Created by Michael Egorov, it’s a key part of the DeFi ecosystem, offering users a transparent, self-custodial alternative to traditional financial systems.
Unlike centralized platforms, Curve operates as a decentralized autonomous organization (DAO), meaning its governance is community-driven through voting power tied to vote-escrowed CRV tokens. This gives users a say in the platform's direction and decisions.
Curve doesn’t just handle trades—it also supports lending and borrowing by integrating with protocols like Yearn Finance, amplifying earning opportunities for users with deposited funds. Its focus on both volatile assets and stablecoins makes it versatile, appealing to both risk-averse and high-yield seekers.
In short, Curve is a powerhouse in the DeFi ecosystem, offering a fair, accessible, and efficient alternative to traditional finance.
Decentralized exchanges like Curve use automated market makers (AMMs) to replace order book trading. Instead of having an order book, AMMs uses a mathematical algorithm to quote asset prices for buyers and sellers. But before buyers or sellers are able to trade on the exchange, external users must deploy capital into liquidity pools for the AMM to utilize. External users that provide capital for AMMs are addressed as liquidity providers.
Liquidity providers for Curve pools are able to earn yield via trading fees from buyers and sellers, and also earn Curve’s native token, CRV, if the pool is incentivized. CRV’s is Curve’s governance token, which allows CRV stakers to earn trading fees generated by the protocol, earn more CRV tokens, and vote on governance proposals like raising trading fees.
Launched in January 2020, Curve has been wildly successful and popular for stablecoin trading, generating over $250 billion in cumulative trading volume and over $100M in trading fees since its launch.
The risks of using Curve change depending on whether the user is a trader or liquidity provider. Traders bear little to no risk, as they only briefly interact with the protocol to exchange tokens. Liquidity providers deposit their capital for a longer period of time, and may be concerned with potential smart contract bugs that would allow a hacker to drain their capital.
Similar to Aave, Curve has been operating since January 2020 without any major exploits or hacks. It had over $24 billion dollars of total value locked in the protocol at its peak, acting as a huge bounty for any hacker to exploit the protocol if it were possible.
Liquidity providers on Curve can earn yield varying from 0% to over 200%, as yields depend on trading activity and token incentives. The higher yields usually come from providing liquidity for small market cap coins, with increased directional risks for liquidity providers.
Interest earned for providing liquidity on safe stablecoins like USDC, USDT, and DAI usually hovers around 2% to 5% during average market conditions.
OUSD has integrated a list of curated DeFi protocols to earn yield for its users, Curve being one of them. By having a variety of DeFi protocols that OUSD can deploy stablecoins to, OUSD has the ability to deploy capital to the strategies that earn the highest yields at that time. By doing so, OUSD has been yielding approximately 22% over the trailing 14-days (data as of January 2025).
Since yields are dynamic, OUSD can earn more yield than lending on Curve, Aave, or Compound alone. It’s also ideal for holders dealing with less capital, as OUSD rewards accrue directly to your wallet daily. This means you will not have to pay prohibitive gas fees to harvest your rewards, and OUSD remains fully liquid while earning interest.
OUSD can be bought directly on the Origin dapp, through Curve itself, or on centralized exchanges such as Kucoin or Gate. If you purchase through the OUSD app, you’ll be minting fresh OUSD with DAI, USDT, or USDC, whereas buying on a secondary market can be done through stablecoins, USD, or crypto.
Most of the differences between Curve’s biggest competitors stem from their pricing algorithms, and are known as:
Curve is considered as one of the blue-chips among DeFi platforms due to its lack of exploits, age, and popularity. Given its smart contract performance in an adversarial environment where code is law, we believe that Curve is one of the safest protocols in crypto.
What is an inverted yield curve and why does it matter to DeFi investors?
An inverted yield curve occurs when short term interest rates exceed long term rates, such as the 30-year treasury and the 10-year treasury. This inversion can signal economic downturns, leading bond investors to seek safer, more liquid assets, sometimes pushing them towards DeFi platforms for better yields and stability.
How does the yield curve reflect the stability of DeFi investments compared to traditional treasury bonds?
The yield curve reflects market expectations for future interest rates and economic conditions. While traditional investments like treasury bonds offer predictable returns, DeFi investments on platforms like Curve Finance can offer higher, albeit more volatile, yields. Understanding the yield curve helps investors balance their portfolios between stable assets and high-yield DeFi opportunities.
