Curve Finds Firm Footing in an Evolving Market

Curve Breaks All-Time High Fee Revenue

Curve’s monthly revenue reached its 18-month high of $78.5 million in May 2022. Market volatility during May 2022 and Jan. 2022 was responsible for this substantial spike. Of particular note is that during the period between April and June, overall DeFi market TVL contracted by $156 billion (or 70%). Despite protocol TVL reducing in line with the wider market during this same period, fee revenue remained high.

Revenues are only one part of the equation. It’s important to take into account that Curve still pays far more in emissions than it generates in fees or bribes distributed to veCRV holders. Last week, the DEX had a spike in fees amounting to ~$4.4M. This was from a one time distribution of fees that the Tricrypto pool had been accumulating.

Delphi first reported on Curve in our Yearn & Curve Research Report in 2020. Back then, the protocol’s liquidity was primarily driven by Yearn via yPools. Much of the DeFi landscape has changed since then, and with it, so has Curve. This report takes the opportunity to revisit Curve’s fundamentals, look into their Stableswap Invariant design, fee revenue mechanism, and how the protocol still manages to maintain its market dominance in DeFi. 

How does Curve’s StableSwap Invariant Work?

One of Curve’s key features is its StableSwap invariant design, which allows for more efficient trading when it comes to pegged assets relative to a constant product AMM. 

Trading efficiency is achieved by reducing price slippage with t