Curve Finance’s recent release positions the company for an AMM takeover.

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Ethereum now has an ETH, WBTC, and USDT trading pool, and more trading pairs and pools are likely to be introduced to the platform in the coming weeks.

According to DeFiLlama, a new release from a basic DeFi protocol tries to integrate two common asset swap models into a hybrid that may transform the dynamics of the automated market maker (AMM) area – a DeFi primitive that now accounts for well over $40 billion in total value locked.

Curve Finance announced the debut of a new “algorithm for exchanging volatile assets” earlier today. Curve’s core feature is intended to facilitate low-slippage swaps between comparable assets, such as one form of stablecoin to another — USDC to DAI, for example — by focusing liquidity on a bonding curve weighted towards a certain price.

The latest version, on the other hand, will enable low-slippage swaps between “volatile” assets, such as an ETH/WBTC pool, or between assets with constantly fluctuating values. The new pools will do this using a mixture of internal oracles based on Exponential Moving Averages (EMAs) and a bonding curve model used by popular AMMs like Uniswap.

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“This creates 5 − 10 times higher liquidity than the Uniswap invariant, as well as higher profits for liquidity providers,” an accompanying whitepaper reads.

While the math and architecture are difficult to grasp, the end result is not: Curve is now entering the broader AMM space with what it believes to be a more efficient product for both traders and liquidity providers, employing automatically rebalancing fees (between.04 percent and.4 percent) and price structures.

“Most common pairs will be added in the coming weeks before we go to a fully permissionless factory where anyone can spin up their own metapool,” Charlie, a Curve team member, stated.

 

The DeFi community has reacted positively, with many dubbing the version “Curve v2.” Observers have been raving over the new model’s capital efficiency and liquidity efficiencies.

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“[Curve v2] extends Curve v1 by optimising for a dynamic price based on pool Exponential Moving Average (EMA), which is a good indicator of the current pool price,” said whitehat hacker and co-founder of DeFi Italy Emiliano Bonassi, comparing the product to Uniswap v3, but which concentrates all liquidity at specific prices.

“It continuously rebalances (and concentrates) the liquidity to [the EMA]. You can think like (not equal) to rebalancing a whole Uniswap v3 pool at once.”

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