Attractive returns for stakers, protocol revenues and the competition between the DeFi protocols suggest that many analysts are optimistic about Curve Finance over the long term.

The market shift after a pullback large enough to conduct a study of the crypto landscape and find solid projects with improving fundamentals has caught the attention of analysts.

One project that has piqued the interest of many, including researchers at Delphi Digital, is Curve Finance, a decentralized exchange (DEX) for stablecoins that focuses on providing liquidity to on-chain accounts with superior linkage curves.

CRV / USDT. 4 hour chart | Source: TradingView

Three reasons Curve DAO Token (CRV) is attracting analysts’ attention is the attractive returns offered to token holders who participate in staking, the competition for CRV deposits on multiple DeFi platforms, and business revenue of the entire curve protocol despite the market downturn.

Attractive profits attract CRV holders

The analysts’ optimistic assessment results from the attractive returns of CRV when used on the Curve platform as well as other DeFi protocols.

Users who use their tokens directly with Curve Finance will receive an average APY of 21% and a CRV Margin Voting (veCRV) on the exchange that allows participation in governance votes.

Vote Lock CRV also enables users to make up to 2.5x profits from the liquidity they offer on Curve.

The number of CRVs blocked in the Governance Protocol was originally expected to exceed the total number of tokens issued by the end of August 2022, but that estimate was increased by an increase in demand for CRV deposits following the launch of Convex Finance in May 2020 .

If the current rate continues, the blocking rate will exceed the clearance level by the end of August 2021.

CRV forecast before and after the introduction of Convex Finance | Source: Delphi Digital

This could put upward pressure on the CRV price if daily demand continues to rise while available supply decreases, resulting in a long-term bullish fall for CRV.

CRV. Deposit competition

Curve Finance has become one of the cornerstones of the DeFi market as it is able to provide liquidity to stablecoins across the ecosystem, while also providing CRV holders with a less risky way to make a profit. .

Because of its growing importance, the demand for CRV and related governance power has increased on DeFi platforms that have incorporated Curve’s stablecoin liquidity.

The two largest competitors for CRV liquidity outside of the Curve platform are Yearn.finance and Convex Finance, which together control approximately 29% of the existing veCRV offering.

Convex veCRV stocks vs. Yearn | Source: Delphi Digital

The demand for more CRV deposits has resulted in a battle between Yearn.finance and Convex Finance as each platform tries to offer the most attractive deals in order to attract CRV holders. Convex currently offers an APY of 87% while Yearn offers stakers a 45% return.

This demand from DeFi platforms in addition to the Curve Finance protocol puts additional pressure on the circulating supply of CRV and is an element of data that should be considered when assessing the long-term outlook for CRV.

Income from the provision of stablecoin liquidity

The third factor that has caught analysts’ attention is Curve Protocol’s ability to generate income in both bull and bear markets as the demand for stablecoin liquidity persists regardless of market volatility.

Almost forgotten! The fee allocation time has expired. Special thanks to @synthetix_io for their great fee-sharing program: It came in almost $ 400,000! pic.twitter.com/pjF1UIFGiK

– Curve Finance (@CurveFinance) June 17, 2021

“The deadline for the distribution of fees has expired. Special thanks to Synthetix for their amazing fee-sharing program: it came in almost $ 400,000! ”

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