Over the past decade, cryptocurrencies have become a hot topic among investment circles and pop culture alike. With growing interest across the globe, several digital currencies have skyrocketed in price and value this year. As a result, the first half of 2021 was a breakthrough for numerous cryptos, with tremendous attention from investors and institutions.
Experts have predicted various digital assets to rally in 2022 and generate massive profits. Curve is one such emerging crypto project. So, if you are looking for a profitable investment for the long run, your search ends here.
Before we understand the factors that make Curve a stellar investment choice, let us learn more about this fast-growing protocol.
Why Choose Curve?
Curve is a decentralized exchange (DEX) and automated market maker (AMM) for stablecoins. Also called Curve Finance, the platform was created to provide Decentralized Finance (DeFi) services for stablecoins traders/investors. It was first launched as a protocol but has since transformed into an entire ecosystem, complete with a DAO.
Curve ensures that stablecoin traders enjoy low fees and low slippage. The platform accommodates only liquidity pools with assets that behave alike. Though liquidity providers have to make do with lower fees, Curve compensates them by integrating external DeFi protocols and providing incentives in the form of CRV tokens.
The programming community of Curve is active, and the project drew significant interest in 2021 for its unique features and technical capabilities, making Curve a must-have asset in your portfolio.
Is Curve Going To Skyrocket In 2022?
Curve is not like other cryptocurrency platforms. For a start, it was designed for the stablecoins niche. From its unique technology to embedded features, the network serves an interest group in the DeFi sector. It provides liquidity pools for stablecoins and facilitates seamless transactions between these pegged currencies and other digital assets.
Curve Finance is very similar to one of the most popular automated market-making platforms, Uniswap. It was designed to be the “Uniswap of stablecoins” and was previously named Stableswap by the founder.
Curve has a native currency, CRV, which is an ERC-20 token built on the Ethereum blockchain. It powers the Curve network and also serves as the utility token. Curve CRV is the digital asset you will need to buy to invest in the network. Its performance in the future will ultimately determine whether you will make a profit or a loss from the investment. Though there are other ways to earn from the network, trading the token is a common way to profit from the network's growth.
Even before the launch of the Curve token (CRV), the Curve protocol had conquered its target market, thanks to its high yield and low slippage.
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Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
Factors That Help Curve Surge to New Heights
1. Stable Liquidity Pools
The unique liquidity structure of Curve makes it a stellar investment choice.
On AMMs like Uniswap, liquidity pools can be made up of any token, causing high volatility. By limiting the pools and the types of assets in each pool, Curve minimizes impermanent loss, an AMM phenomenon in which liquidity providers suffer a loss in token value relative to the market value of that token due to volatility in a liquidity pool.
However, an impermanent loss is not always damaging. Volatility and slippage can help users who try to profit from entering and exiting a liquidity pool at the right time. By trading off the high risk (and sometimes high reward) aspect of volatility, Curve attracts liquidity providers using DeFi composability. This means you can use what you have invested on the Curve platform to earn rewards elsewhere in the DeFi ecosystem.
Unlike Uniswap or Balancer, Curve does not try to keep the values locked away in different assets. As a result, Curve is able to concentrate liquidity near the ideal price for similarly priced tokens (in a 1:1 ratio) to have liquidity where it is needed the most. Thus, Curve can achieve a much higher liquidity utilization than otherwise possible with those assets.
Notably, there is more to Curve than stablecoins. For example, tokenized versions of bitcoin such as wBTC and renBTC also make up Curve’s liquidity pools. Compared to a stablecoin, Bitcoin is highly volatile, but the Curve method still works because tokens in Curve pools do not need to be stable — they need to be stable relative to other coins in the same pool. In other words, wBTC and renBTC can be in the same Curve liquidity pool, whereas wBTC and USDC would not be a functional combination.
The stability of liquidity pools in Curve is what makes the platform truly unique. This feature has attracted investors around the world to this growing DeFi platform. Curve is likely to grow and surge in value, making now a good time to buy CRV.
2. Composability: Incentivizing Liquidity Providers
As a growing DeFi platform, investing in Curve now is likely to generate massive profits in the future.
On an AMM exchange such as Uniswap, you can earn fees whenever a trade is made. On Curve, trading fees are lower than on Uniswap, but you can also earn rewards from outside of Curve with interoperable tokens.
For example, when DAI is lent out on the Compound platform, it is exchanged for a liquidity token called cDAI, which automatically accumulates interest for the holder. Holding cDAI means you have a right to withdraw DAI from Compound plus interest. In addition, curve users can use cDAI in their liquidity pools, thus achieving the second layer of utility and potential earning from the same amount of investment.
The ability to use Compound’s cTokens on Curve exemplifies the composability benefits in the DeFi ecosystem. And Compound is just one example of an external DeFi protocol with which Curve integrates. The protocol also integrates with Yearn Finance and Synthetix in order to maximize incentives for liquidity providers.
3. CRV Tokens
Adding CRV tokens to your investment portfolio can effectively help in diversification.
The Curve token (CRV) is an ERC-20 token on the Ethereum blockchain. It is both the utility and governance token of Curve Finance. As the governance token, it bestows voting power for holders in the DAO. Participants in the community can vote to add new yield pools, change fee structures, and facilitate token burning for the sake of the ecosystem.
Curve CRV also helps to facilitate the swapping of stablecoins with volatile digital assets. Currently, the network supports USDT, DAI, USDC, BUSD, TUSD, sUSD, and PAX. It also supports a handful of Bitcoin-pegged pools.
DeFi is growing at an impressive rate. The emerging sector can change the future of banking and finance, and Curve will undoubtedly benefit from its exploits. Buying CRV tokens now is an effective way of becoming a part of this growing DeFi protocol.
Why Curve Will Skyrocket: Expert Predictions
Various top prediction sites have predicted what Curve can be worth in the future. For example, Wallet Investor is very optimistic about the future of Curve. It predicted that the coin would be worth as much as $8.06 by 2022. By 2026, the platform estimated that Curve would be worth about $35.33.
Digital Coin Price is also hopeful about the future of Curve. It predicted that the coin could be worth $4.64 before the end of 2022. By 2023, it predicted that the token would be worth about $5.14. In the next five years (2027), the site estimated that Curve can be worth $10.01.
Read Also: Why Curve Is Going To Explode
The Bottom Line
Before making a financial commitment to a cryptocurrency, it is vital to confirm that it is a safe investment. Of course, the market is risky, and some platforms can jeopardize your investment. However, Curve is a fast-growing DeFi platform filled with potential.
Besides the risk of impermanent loss, Curve is a relatively safe platform for stablecoin enthusiasts. It has been audited in the past and found to be secure. That, however, does not eliminate any risks associated with the stablecoins that it supports. Hence, investors have to perform market research before investing their savings in any crypto platform.
That said, the Curve platform is likely to skyrocket in 2022 and break its previous price records.
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Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
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