Curve: A DeFi fortress built on liquidity, incentive mechanisms, and community construction.

Author: Karl Marx OnChain, encryption KOL; Translated by: Felix, PANews

Curve did not survive each bear market by luck.

It survives because it is designed for one thing: sustainability.

From a mathematical experiment in 2019 to becoming a global liquidity pillar by 2025, Curve's development journey is an evolution of real yields, incentive alignment, and community resilience.

Let's review year by year:

2019: The birth of StableSwap (a new AMM concept)

At that time, DeFi was still in its infancy. Stablecoins like DAI, USDC, and USDT were very popular, but traders faced high slippage, and the yields for liquidity providers (LPs) were also very low.

Michael Egorov discovered this flaw and launched StableSwap, a new AMM model that combines constant-sum and constant-product functions, minimizing the slippage of stable assets to near zero.

This is not just another DEX concept.

This is a breakthrough in mathematics, bringing deep liquidity and real returns to LP.

StableSwap has become the DNA of Curve Finance: the first true AMM optimized for stablecoin efficiency.

2020: The Dawn of Curve Finance and veTokenomics

At the beginning of 2020, Curve Finance officially launched, with a clear mission:

Providing stable returns through efficient stablecoin liquidity. However, its true innovation came in August 2020 with the launch of CurveDAO and the veCRV model (voting escrow mechanism), which is a token economic design that redefines DeFi governance.

Curve no longer rewards short-term participants, but instead incentivizes long-term collaboration:

Obtain veCRV

• Vote to decide which funds pools receive rewards.
• Obtain higher returns

This structure creates a positive feedback loop, transforming LPs into stakeholders and initiating the legendary “Curve Wars,” where DAOs like Convex, StakeDAO, and Yearn compete fiercely for veCRV power.

By the end of the year, Curve's TVL surpassed $1 billion, solidifying its position as a pillar of DeFi liquidity.

2021: Expand liquidity and deepen the community

In 2021, Curve proved its scalability.

• Its daily trading volume reaches 1 billion USD, generating 400,000 USD in fees daily, all allocated to veCRV holders.
• The launch of Tricrypto (USDT/WBTC/WETH) has pushed Curve beyond the realm of stablecoins.

While other projects pursue unsustainable profits, Curve focuses on real yields and liquidity depth.

Every transaction creates value, and every LP earns real profits.

At the same time, the community is gradually maturing, with an increase in governance voting and intensified bribery activities. The “Battle of Curve” has turned governance into a masterpiece intertwined with economics and game theory.

Curve is no longer just a protocol, but an economic ecosystem.

2022: Bear Market Stress Test

As the 2022 bear market severely impacted “DeFi 2.0”, Curve's fundamentals were tested, but it performed strongly.

Even though liquidity in the DeFi space is generally exhausted, Curve's StableSwap invariant system and veCRV structure still keep the incentive mechanism consistent:

• In January 2022, the TVL exceeded $24 billion, reaching a peak, and by mid-2022, Curve still had over $5.7 billion in TVL.
• LP earns stable fees from stable trading volume
• Due to long-term locking, the selling pressure of CRV remains low.

Curve has also expanded its cross-chain business through Aurora, Arbitrum, and Optimism, solidifying its position as a multi-chain liquidity standard.

As other projects have disappeared, Curve has demonstrated economic resilience through concrete actions.

2023: Crisis and Community Resilience

In August 2023, Curve Finance was attacked due to a vulnerability in the Vyper compiler, resulting in a loss of approximately $73 million, affecting multiple stablecoin pools. This was undoubtedly a fatal blow for most protocols.

But Curve managed to pull through.

In a matter of weeks, white hat hackers, partners, and veCRV holders acted swiftly. Through community coordination and negotiation, 73% of the stolen funds were recovered, which is quite rare in DeFi history.

At the same time, Curve launched crvUSD, a decentralized over-collateralized stablecoin that brings real utility and new sources of revenue to veCRV holders.

The Curve community has proven that it is not only active but also has been tested in real-world scenarios.

2024: Expanding the Ecosystem Flywheel

Curve has evolved from an Automated Market Maker (AMM) into a complete DeFi ecosystem:

• LlamaLend: Permissionless lending service that supports ETH and WBTC as collateral.
• Savings crvUSD (scrvUSD): A yield-generating stablecoin that connects DeFi and TradFi.
• The inflation rate of CRV has dropped to 6.35%, solidifying the long-term value of the token.
• The partnership established with the BUIDL fund supported by BlackRock connects Curve's liquidity with institutional capital.

The veCRV system continues to support this growth: integrating users, DAOs, and even institutions around Curve's liquidity engine.

2025: Liquidity, Yield, and Legacy

By 2025, Curve is no longer just a DEX; it has become a pillar of DeFi liquidity.

In the first quarter, the trading volume reached 34.6 billion USD (a year-on-year increase of 13%), with over 5.5 million transactions and an average daily trading volume of 115 million USD. The protocol continues to generate 19.4 million USD in fees annually for veCRV holders.

crvUSD reached a historical market cap of 178 million USD, while Curve ranks second among global DEXs with a TVL of 1.9 billion USD.

Originally started as a stablecoin automated market maker (AMM) project, it has now evolved into a self-sustaining liquidity network based on mathematics (StableSwap), economics (veTokenomics), and community belief.

The secret to withstanding the test of time

The three pillars of Curve are: the liquidity depth provided by StableSwap; the incentive mechanism provided by veTokenomics; and the resilience of the community.

As popular projects rise and fall, Curve consistently adheres to its core advantages: transforming liquidity into infrastructure and converting yields into lasting value.

The establishment of Curve is not for a fleeting moment, but for long-term development.