Choppy markets after a major pullback provide ample time to take a look at the cryptocurrency landscape and find solid projects with improving fundamentals that have caught the attention of analysts and token holders.
One project that has caught the interest of many, including researchers at Delphi Digital, is Curve Finance, a decentralized exchange for stablecoins that focuses on providing on-chain liquidity using advanced bonding curves.
Three reasons Curve DAO Token (CRV) is attracting analysts’ attention is attractive returns for token holders who participate in staking, competition for CRV deposits on multiple decentralized financial platforms (DeFi), and healthy profits for the Curve -Log overall despite the market downturn.
Opportunities for returns attract token holders
The main source of the optimistic view of the analysts lies in the attractive return of CRV when using the token on the Curve platform as well as other DeFi protocols.
Users who choose to wager their tokens directly on Curve Finance will be offered an average APY of 21% and in return will be given a Voted CRV (veCRV), which allows them to participate in governance votes that are conducted through the Protocol take place.
Vote-locking CRV also allows users to increase the liquidity they put on Curve by up to 2.5X.
The amount of CRV tokens locked in the protocol for governance was originally intended to exceed total token issuance by the end of August 2022, but that estimate has since been preferred due to increased demand for CRV deposits following the launch of Convex Finance in the May 2020.
If the current pace continues, the lockdown rate will have exceeded the issue rate by the end of August 2021.
This could potentially put upward pressure on the CRV price if daily demand continues to increase while the available supply decreases, leading to a bullish argument for the CRV price in the long run.
Competition for CRV deposits
Curve Finance has become one of the cornerstones of the DeFi market thanks to its ability to provide stable coin liquidity across the ecosystem while offering token holders a less risky way to generate returns.
Because of its rising importance, the demand for CRV and related governance power has grown on DeFi platforms that have incorporated Curve’s stablecoin liquidity.
The two biggest contenders for CRV liquidity outside of the Curve platform are Yearn.finance and Convex Finance, which together control approximately 29% of the currently existing veCRV offering.
The demand for more CRV deposits has created a battle between these two platforms as each of them tries to provide the most attractive incentives to lure CRV holders, with Convex currently offering an APY of 87% while Yearn Stakern offers one Offers a return of 45%.
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This demand from DeFi platforms in addition to the Curve Finance protocol puts further pressure on the circulating supply of CRV and is another data point to consider when assessing the long-term outlook for CRV.
Income from the provision of stablecoin liquidity
A third factor that is attracting analysts’ attention is the Curve Protocol’s ability to generate income in both bull and bear markets as the demand for stablecoin liquidity continues whether the market is rising or falling falls.
Almost forgotten! The fee allocation time has expired. Special thanks to @synthetix_io for their great fee-sharing program: it got almost $ 400,000! pic.twitter.com/pjF1UIFGiK
– Curve Finance (@CurveFinance) June 17, 2021
According to Delphi Digital:
“Curve is one of the few DeFi protocols that makes revenue (i.e., log income) with a healthy trailing 30d P / E of ~ 39.”
In addition to sustained sales growth, Curve’s stablecoin component has helped protect the platform from the sharp decline in Total Value Locked (TVL) seen on most DeFi platforms. Currently, Curve is the top DeFi platform in terms of TVL with $ 9.34 billion to TVL.
The resilience of the protocol’s TVL combined with its ability to generate revenue from staked assets and the growing competition for CRV deposits from integrated DeFi platforms are three factors that have caught the attention of cryptocurrency analysts and have the potential to lead to further growth of the stablecoin -focused protocol.
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