Apr 7, 2022 - Economy & Business

Curve DeFi app leads push on blockchains not called Ethereum

Data: DeFi Llama; Chart: Will Chase/Axios; (Optimism and Moonbeam were excluded due to their small sizes.)

The Curve Finance app has been way out ahead of most similar DeFi applications in launching on blockchains other than Ethereum.

Why it matters: It is diversifying its bets, figuring that other blockchains will blow up and host a lot of trading. Curve is positioned to take some of that market share.

Details: Curve is, ostensibly, an app for trading tokens that tend to have the same price (think: stablecoins that track the U.S. dollar or bitcoin derivatives). But it can really be seen as a yield machine.

  • To make those swaps, it needs users to deposit funds as "liquidity providers." Those deposits earn trading fees, but they also earn the platform's curve dao token (CRV) — basically free money.
  • Hunger for that token is the true driver of Curve's market clout.

Context: Money entrusted is known as "total value locked," and in those terms, Curve Finance is the biggest DeFi app of them all.

  • It has $21 billion in locked assets, but $18 billion of that is on the second-largest blockchain, Ethereum.

By jumping onto new chains, Curve has been able to find additional liquidity rewards for its users. Curve's liquidity providers quickly found $200 million to deposit after the Fantom blockchain announced extra incentives for the biggest apps on the chain.

The bottom line: Curve's size illustrates that DeFi is still fundamentally a game of seeking yield over utility.

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