Curve DAO token (CRV) is the native asset underpinning one of the world’s largest decentralized finance (DeFi) platforms Curve.Finance, a decentralized exchange used to trade cryptocurrencies (especially stablecoins) without the need for a middleman.
CRV, also known as the Curve DAO token, is capped at a total of 3.03 billion tokens, according to the Curve.Finance website. Sixty-two percent of those tokens will go to community liquidity providers, 30% to Curve.Finance’s team and investors, 3% to employees and 5% to the “community reserve.”
CRV was created to try to draw liquidity to the platform and to encourage participation in its governance process, meaning voting on important decisions and potential changes to the protocol.
When CRV was launched in August 2020, its price immediately hit an all-time high of $6.93, but then sank to as low as $0.33 by October 2020.
In 2021, CRV’s prices inched back toward their initial all-time high. Amid the industry-wide bull run at the beginning of 2021, CRV climbed to $4.04. That was followed by a swing back back down to $1.28 in July, and then a second surge to $5.80 in November 2021.
How Curve.Finance works
Curve.Finance is a popular DeFi platform designed to replace legacy financial institutions with a decentralized trading platform that doesn’t rely on an intermediary. Rather, it relies on computer programs. Curve.Finance operates primarily as a decentralized exchange that removes the normal intermediary from the process of exchanging cryptocurrencies through the use of an automated market maker (AMM) system.
Curve.Finance works similar to other AMMs like Uniswap and Balancer, but it favors the stability of stablecoins, which mitigate the volatility of most cryptocurrencies by tying the price of the token to another asset – most commonly the U.S. dollar. That means more stability and lower fees for Curve.Finance’s users than they can get on other AMMs. The downside, however, is that yield farmers might not make as much money on the platform.
Curve.Finance is run by a decentralized autonomous organization, or DAO, a company, organization or other type of group whose rules are enforced by a blockchain instead of a person or group of people. This is where the token fits in. Users can use their Curve DAO token (CRV) to vote on changes to the DAO, giving users control over important decisions affecting the platform.
The technical makeup of the DAO is described in more detail in the Curve DAO white paper. Curve’s DAO is built on top of Aragon, a platform for making it easier to build DAOs.
Key events and management
In 2019, tech entrepreneur and software engineer Michael Egorov published the white paper that laid out the technical foundation for Curve.Finance’s platform. The project went live in February 2020.
The CRV native token was started to power Curve’s new DAO in August 2020. In one interesting twist, Curve wasn’t quite ready to launch the DAO, but an anonymous user launched the smart contract kickstarting the DAO anyway, because the smart contract code was open-source. The Curve team decided to just go along with it.
In 2021, the Curve.Finance community was embroiled in the so-called “DAO wars.” Bad actors have tried to manipulate the DAO rules in their favor. In response, the Curve Emergency DAO cut one bad actor from participating.