What Is Curve AMO?
Curve AMO is a software that operates an automated market maker (AMM) service focused on stablecoins. It utilizes various cryptocurrencies to facilitate efficient token exchanges with minimal fees and slippage. The platform exclusively supports liquidity pools consisting of assets that exhibit similar behavior, resulting in reduced costs for liquidity providers. However, Curve AMO incentivizes participation by integrating with external decentralized finance (DeFi) protocols and offering rewards in the form of Curve DAO (CRV) tokens and interest.
For example, when dealing with FRAX, a fractional algorithmic stablecoin, Curve AMO utilizes the stablecoin and USDC collateral to provide liquidity for the protocol and maintain the peg. This enables the Curve AMO controller to establish and collect administrative fees from FRAX stablecoin holders and perform various future functions. The protocol can also transfer idle USDC collateral or new FRAX to its Curve pool to enhance liquidity, tighten the peg, and generate trading revenue.
Author: Sam Kazemian is the Founder of Frax, the world’s first fractional algorithmic stablecoin that is partially backed by collateral and stabilized algorithmically. Frax is an open-source and permissionless project that brings a truly trustless, scalable, and stable asset to the future of decentralized finance. Kazemian has extensive experience as a prominent blockchain entrepreneur and cryptocurrency enthusiast, having co-founded the blockchain-based knowledge base, Everipedia.