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Key Takeaways
- Curve has damaged previous its yearly excessive.
- Elevated demand for the CRV token and low circulating provide are driving up the value.
- Presently, over 89% of all CRV tokens are locked up in DeFi protocols.
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Curve has damaged previous its April highs, fueled by elevated demand for CRV tokens and a low circulating provide.
Curve Breaks Out
CRV tokens are in excessive demand.
The DeFi DAO token is climbing larger, breaking previous its yearly excessive of $4.66 achieved in April. The CRV token is presently buying and selling at $4.91, up 75% over the previous week.
Curve Finance, the issuer of CRV tokens, is a DeFi protocol specializing in like-asset swaps comparable to stablecoins and wrapped property. Customers can present liquidity to Curve’s swap swimming pools to earn CRV tokens rewards, which might then be deposited into different DeFi protocols to generate extra yield.
This 12 months a complete sub-DeFi ecosystem has shaped round yield optimization for CRV tokens. Each Yearn Finance and Convex Finance supply enticing yields to customers keen to lock up their CRV tokens in vaults for as much as 4 years.
The competitors between these two protocols, typically known as “The Curve Wars,” has quickly consumed a big portion of the whole CRV token provide. Moreover, a brand new “DeFi 2.0” protocol, abracadabra.cash, permits customers to borrow its MIM stablecoin utilizing Curve Liquidity Supplier tokens as collateral, additional decreasing the CRV provide.
Over 89% of all CRV tokens are presently locked up in varied DeFi protocols, with a mean vesting time of three.68 years. With the provision shrinking and demand staying fixed, the CRV token is quickly rising in worth. Lately, the provision of CRV tokens has turn into disinflationary, which means that extra tokens are being locked up than new ones distributed.
Since Might’s market crash, DeFi protocol tokens have underperformed in comparison with the market common. Whereas Layer 1s comparable to Solana and Avalanche have loved vital beneficial properties, Aave and Yearn finance’s tokens have remained stagnant. Whether or not Curve’s present value motion is the beginning of a DeFi revival out there stays to be seen.
Disclaimer: On the time of penning this function, the creator owned BTC, ETH, and a number of other different cryptocurrencies.
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