Curve DAO (CRV) is the utility token of Curve Finance, a decentralized finance (DeFi) protocol that acts as a decentralized exchange (DEX) of stablecoins. ^[1]

History

Curve Finance was founded in January 2020 by Michael Egorov, a Russian physicist and software engineer. ^[6] The protocol's native governance token CRV was officially scheduled for launch on the the 14th of August 2020, but an anonymous developer with a newly created Twitter account - @0xc4ad, tweeted on August 13, 2020, affirming they had deployed Curve DAO smart contracts. The developer spent 19.9 ETH (~$8,000) in fees to deploy the smart contracts on Ethereum.

The Curve Finance team was unaware of this event, and since the contracts were deployed, some users started staking yCRV tokens, which represented shares of Curve's liquidity pools, to earn CRV tokens. This led to confusion and accusations of "pre-mine" among the DeFi community. More than 80,000 CRV tokens were pre-mined before the Curve team could verify the deployed smart contract. Initially skeptical, the individuals involved eventually found evidence of the deployment being executed accurately, incorporating the correct code, data, and admin keys. As a result, they publicly announced their decision to adopt the CRV launch on August 14, 2020, citing the growing traction and interest surrounding it. ^[7]

Overview

The primary objectives of the Curve DAO token involve incentivizing liquidity providers on the Curve Finance platform and promoting active user participation in the governance of the protocol. CRV has three primary functions: voting, staking, and boosting. Engaging in these activities requires the process of vote locking CRV tokens and acquiring veCRV. ^[4]

veCRV stands for vote-escrowed CRB, which is a CRV locked for a period of time. The longer the locking period, the more veCRV is received. ^[4]

Mechanism of Action

Curve Finance operates as a decentralized exchange (DEX) using an automated market maker (AMM) model instead of a traditional order book. This system allows trades to be executed directly against liquidity pools funded by users. The protocol's key innovation is its StableSwap algorithm, which is specifically designed for stablecoins and other assets with closely pegged values (like DAI, USDC, and USDT). The algorithm concentrates liquidity around a stable price point (e.g., $1), which enables large trades to be executed with very low slippage and minimal fees, offering high capital efficiency. ^[6]

Staking

By staking (locking) CRV tokens, users can receive trading fees generated by the Curve protocol. A proposal by the community has introduced a 50% administrative fee on all trading fees, which is distributed to veCRV holders. These fees are collected and utilized to purchase 3CRV, which is the LP token for the TriPool. Subsequently, the acquired 3CRV tokens are distributed among veCRV holders. ^[4]

Boosting

CRV token holders can boost their rewards by providing liquidity. By vote locking CRV tokens, users can acquire voting power, enabling them to actively participate in the DAO's decision-making process. This vote locking mechanism grants them the ability to earn a boost of up to 2.5 times on the liquidity they contribute to the Curve platform. ^[5]

Voting

After CRV holders vote-lock their veCRV tokens, they gain the ability to actively participate in the voting process for different DAO proposals and pool parameters. This voting privilege allows them to have a say in shaping the decisions and directions of the DAO. ^[4]

Ecosystem Developments

Throughout 2024, Curve Finance saw significant growth in user engagement and its ecosystem. The number of unique users on the platform doubled from 30,000 in 2023 to 60,000 in 2024, marking a 127.7% annual growth rate. In March 2024, the platform introduced LlamaLend, a lending mechanism with liquidation protection, which expanded to multiple chains like Arbitrum and Optimism by the end of the year. ^[7]

In October 2024, Curve launched Savings crvUSD (scrvUSD), a yield-bearing stablecoin. Within its first month, scrvUSD attracted over $20 million in deposits, and its market cap grew by 30% to $78 million. The stablecoin was also integrated with platforms like Pendle and Spectra to diversify yield farming opportunities. ^[7]

By its fifth anniversary on August 13, 2025, the protocol had become a core component of DeFi's liquidity infrastructure. Around this time, founder Michael Egorov's focus shifted toward developing Yield Basis, a new AMM-based protocol aimed at solving impermanent loss. ^[10]

Tokenomics

Initial Supply

The initial distribution was about approximately 1.3 billion CRV tokens, representing about 43% of the total supply. Five percent of the tokens were designated for pre-CRV liquidity providers, with a vesting period of one year. Shareholders, including the team and investors, received 30% of the tokens with vesting periods ranging from two to four years. Three percent was allocated to employees, subject to a two-year vesting period. An additional 5% was set aside for the community reserve. At launch, there was no circulating supply, and the initial release rate was estimated to be around 2 million CRV tokens per day. ^[3]

Supply Distribution

Curve DAO (CRV) token has a total supply of 3.03 billion tokens, distributed as follows: 62% to liquidity providers, 30% to shareholders, 5% to a community reserve, and 3% to employees. The shareholder and employee allocations are subject to vesting schedules, typically 2-4 years.

On its fourth anniversary in 2024, Curve Finance significantly reduced the inflation rate of the CRV token. As of August 13, 2024, the annual inflation rate of CRV was cut from 20% to 6%. This reduction is part of a model where CRV emissions will be cut in half every four years, similar to the Bitcoin halving model. This change marked the end of all vesting schedules, meaning future CRV emissions are directed solely to liquidity providers. The move was designed to maintain the long-term stability of the token's value and encourage continued participation in the DeFi community. ^[7]

On August 14, 2025, the protocol underwent another scheduled reduction in CRV token emissions. This event, part of Curve's deflationary tokenomics model, lowered the annual CRV issuance rate by 15.9%. ^[11]

Security Incidents

July 2023 Reentrancy Attack

On July 30, 2023, Curve Finance experienced a significant reentrancy attack that resulted in a loss of approximately $61 million from several liquidity pools. ^[8] The exploit was traced to a vulnerability in specific versions of the Vyper programming language, which was used by the affected pools. ^[9] Following the incident, the attacker began returning a portion of the stolen assets, ultimately sending back about 73% of the funds. ^[8] To address the remaining losses for liquidity providers, the Curve DAO voted in February 2024 to approve a compensation plan. The proposal involved distributing $44 million worth of CRV tokens to the victims of the hack. ^[9]

May 2025 Social Media Hack

On May 5, 2025, Curve Finance's official X (formerly Twitter) account was compromised through a social engineering attack. The attacker posted a fraudulent announcement for a "first CRV airdrop," directing users to a malicious phishing website designed to drain their wallets. The Curve team responded quickly, with founder Michael Egorov confirming the compromise via his personal account minutes after the fake post appeared. The malicious tweet was deleted, and control of the account was restored within a few hours. The protocol's smart contracts and user funds were not affected, as the breach was limited to the social media account. The incident highlighted the importance of security beyond smart contract code, emphasizing vulnerabilities in communication channels and human infrastructure. ^[6]