Earning interest with Curve

tl;dr — Curve is a decentralized exchange (DEX) for (mostly) stablecoins, and you can earn “interest” from staking (supplying your tokens to Curve and locking it up).

“Interest rates” will vary based on the risks you undertake for coins inside the pool, amongst other factors.

Let’s find out how easy (or hard) it is to earn a decent interest.


How Curve works

Curve is a decentralized exchange for stablecoins. And liquidity is needed to ensure there’s someone else available to accept the opposite side of a trade.

To incentivize liquidity providers, Curve takes a trading fee and pays a small cut to these liquidity providers.

The larger the volume on Curve, the higher the annual percent yield (APY), or how much you earn per year.

Here are the steps I took to start earning interest on Curve.

Onward!

1. Connect to Metamask

Connecting to Curve dApp is easy with Metamask.

The interface really deters anyone who’s not the most determined though …

I figured, if I can manage to work with this beast, I can work with any dApp interface.

2. Picking a Pool

Why would you consider pools that are paying less APY?

It’s mainly due to additional risk you take on being exposed to volatility of non-stablecoins.

I picked tricrypto, which consists of USDT, wBTC, and WETH, so I’m somewhat exposed to volatility of BTC and ETH.

For the sake of maximizing my APY, I went ahead and put a small chunk of money in.

3. Depositing into a Pool

It was painful to wait several hours, because I was minimizing my transaction fees on Ethereum, but I did it.

Honestly I can’t do much — as I don’t enough CRV and locking it as veCRV (vote escrowed CRV) to do any kind of voting.

Sad.

Takeaway

  • Curve is best for stablecoin exchanges

  • As with a lot of these DeFi protocols, it pays to be early (I was not)

  • The APY is not very easy to understand. Despite saying 6.78% base APY, my dashboard did NOT show this.

  • If I leave it for a month, I’d earn 2.18% on my deposit (which is alright).

  • Their interface really should show the calculation on hover, so to help newbies like me see how much I’m getting.

  • It’s the FEEs that accumulate into doing this process that bugs me. But that’s a force at play to keep CRV (Curve’s token) more valuable

All in all, I see Curve as a “high risk savings account”.


What are your thoughts on this?

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