What is Swerve Finance and How is it Related to Curve Finance?

Updated on 14 September, 2022 8:49 AM
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    Swerve ($SWRV) is a totally community-owned and ruled fork of Curve Finance ($CRV). Contributions to the group (DeFi) projects arose from a desire to have easy access to traditional financial services without relying on centralization.

    Administration, pre-mining, and fixed distribution of coins to platform founders or shareholders are some of DeFi's most contentious areas. As a result, DeFi systems have been forked in order to produce more transparent products. Swerve is an example of such a fork.


    What is Curve Finance and the origin of Swerve?

    Curve Finance is a blockchain-based network that facilitates stablecoin exchange. Its primary advantage is that dealing with stablecoins outcomes in minor slippage, which increases the profitability for liquidity providers.

    Curve also has a decentralised autonomous organisation (DAO) that uses voting to improve distributed management. Admittedly, Micheal Egorov, the platform's founder, controls more than 50 percent of the voting power. Thus, Swerve was founded to provide a platform that is 100% owned by the public.

    The Swerve project was revealed on September 3, 2020, and it went live the following day. Swerve was founded by an anonymous programmer known as "John Deere," who began it as a side project in addition to his full-time job.

    How is Swerve Finance different from Curve Finance?

    Swerve can be considered a clone or duplicate of Curve apart from a few features which are missing in Swerve. These are the lack of an initial mine, no extended token distribution, no token distribution to shareholders, and the absence of an effective founder or shareholder.

    Swerve was created as an alternative to Curve that focuses on the community.   According to Swerve's founder, the platform provides better swapping prices and higher annual percentage returns on stablecoins than most other platforms. Swerve's founder has been harshly critical of Curve, claiming that the system is not fairly governed and that the platform's founder wields far too much power.

    Function of Swerve

    Swerve has a single pool that accepts major stablecoins such as DAI, TUSD, USDT, and USDC. It should be noted that the establishment of new pools is a function of the protocol's DAO.

    As a result, users can vote to add new pools. Swerve, unlike other DeFi platforms, does not easily block smart wallets, enabling projects like Yearn. Finance and other DeFi-based cryptographic protocols to participate in its voting.

    Trading on the system is applicable to a 0.03% fee, of which 50% goes to liquidity providers and 50% goes to the Swerve treasury, with a cap of $200,000. In October 2020, founder John Deer stated that his project's priorities were to continue increasing the platform's storage capacity and better incentivize the ownership of SWRV.


    Tokenomics of Swerve Token ($SWRV)

    Swerve token (SWRV) is Swerve's native token, with a total supply of 33,000,000 tokens that are unlocked yearly, with all cryptocurrency going to the liquidity providers. It is distributed freely to the general users with no reserve for the creators or the team.

    The first nine million SWRVs were distributed two weeks after the launch. Liquidity providers then received an additional 9 million SWRV tokens in the initial year. The residual 15 million tokens are going to be distributed evenly over five years at the rate of three million tokens per year.

    Swerve also employs a prize gaming technique known as "Boost," which allows liquidity providers who lock up SWRV to earn a higher APY compared to those who do not use the boost feature. The rate at which one's APY increases is decided by a calculation that takes into account, among other things, the number of SWRV tokens locked by the trader and the total amount locked.

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