Trading Stable Coins on Curve

By RockHoward | Rock's DeFi Playbook | 25 May 2021


One thing that becomes obvious once you dive into DeFi is the importance of stable coins in the overall cryptocurrency ecosystem. In the long run stable coins pegged to the dollar are destined to lose value as the actual U.S. Dollar declines. However in shorter time frames stable coins offer a welcome respite from the excessive volatility that is experienced by the overall cryptocurrency universe. Curve Finance recognized this fact very early in the history of DeFi and built a solid platform for stable coin exchange that remains important to this day.

When you first visit the polygon version of Curve you are struck by two things. The first is the old time look and feel of the user interface which is straight out of the 1990s. The next is that there is not much to see. You can swap between 3 stable coins and participate in a liquidity pool and that is all there is to it. Both are true but a visit to the ethereum version of Curve shows how even this simple foundation expands in importance as a platform gains more stable coins and a collection of wrapped versions of cornerstone coins such BTC and ETH. The upshot on the Ethereum Network is that we see a large number of trading options and liquidity pools making it clear that the Curve protocol has significant value. We can expect to see more of the same on the Polygon Network in due time as more of these types of assets become available.

Curve focuses on the sweet spot in the liquidity curve where risks are low and returns are therefore highly reliable. The upshot is that their trading model offers much less exposure to slippage than most other DEXs coupled with significantly lower trading fees. The difference is significant as I noted when I set up identical stable coin swaps on Quickswap and Curve. On Quickswap a trade of 80 USDC delivers 79.575 DAI. On Curve those same 80 USDC fetches 79.92 DAI. Of course these numbers fluctuate a bit over time, but the upshot remains the same. Curve will save you a ton if you are trading large numbers of stable coins.

Rock's DeFi Playbook #6. Use Curve to trade stable coins.

So Curve is basically a one trick pony but it performs that one trick amazingly well and therefore no DeFi playbook would be complete without acknowledging the savings that are available when trading on this platform. The user experience is old school but highly effective. Set up the trade and then hit 'SELL'. (You can ignore the advanced options on Polygon since the network is fast and transactions are cheap.) The messages that pop up as the approval and confirmation steps are accomplished are short and sweet and feature an old school text spinner that is just as effective as any fancy spinner on a more modern UI. The whole process is quick and easy with no frills other than the low fees.

The story of Curve is not complete without a dive into their liquidity pools but I will return to that topic in a future post. For now enjoy the savings on Curve whenever you trade stable coins.

Image Credit: Photo by Trace Hudson from Pexels

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RockHoward
RockHoward

I am a software developer (among other things) that is focused on the Radix Network. I run a free discord for programmers who want to study Rust and/or Scrypto. I also run the Radix Programmer's Guild.


Rock's DeFi Playbook
Rock's DeFi Playbook

Learn the specific steps needed to perform the most common DeFi operations. Starting with Metamask and then moving on to a variety of dapps on the Polygon (aka Matic) Network, you will learn how to perform staking, providing liquidity, leveraged trading, yield farming and buying and selling options. You will need to do your own research on your best course of action as nothing in this blog is financial advice.

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