Crypto market: what is CRV, the Curve DAO token?

The crypto CRV is the token of the DeFi Curve DAO project. 

So it is not a coin with its own blockchain, but a token issued on another blockchain (Ethereum’s). 

It debuted in the crypto markets in August 2020, and has lost a lot since then. 

Curve DAO’s (CRV) crypto price trend

The highest market value touched by CRV was practically on the very day of its launch, 14 August 2020, when it even reached over $60. 

The fact is that between August and September 2020 there was the first real boom in DeFi, in a year when at that point there had not yet been any bull run. 

So the DeFi tokens that debuted in the markets between July and August 2020 boomed immediately, except that they began to decline as early as September. 

In fact by the end of August CRV had already plummeted to $2, and with the further collapse in September it ended up hitting an all-time low in late October at $0.33. Practically in less than two months it had already lost almost 99.5% from its highs. 

As of today it is worth about $0.5, which is still 99% less than the highs, but 55% more than the lows. 

Probably this extreme volatility in the first two months was due to an absurdly high initial price, which is perhaps worth simply ignoring to make comparisons. 

Starting at $0.33 in October 2020, with the onset of the last bullrun the price of CRV began to rise, until first exceeding $3 in February 2021, then $4 in April of that year, and finally reaching over $6.5 in January 2022. 

It would be convenient to use this as a reference regarding the maximum value, and not that absurd initial $60. 

Since then it has almost done nothing but fall. 

The collapse of the crypto Curve DAO (CRV)

As early as late January last year, the price of the Curve DAO token was back to $3, but the collapse had just begun. 

In March it also fell below $2, and with the implosion of the Terra/Luna ecosystem it plummeted below $0.7. 

Then again, that implosion threw the entire DeFi world into panic, and Curve DAO is precisely a decentralized finance protocol. 

Actually in the next two months it made a remarkable rebound, with a +100% that brought it back above $1.4, but only to start then falling again in the second half of August. 

With the failure of FTX it fell as low as $0.5, and there it remained until late 2022. 

2023 seemed to start well, with a return above $1.2 in February, but by March it was back below $1, and by June it was back below $0.6. 

There was another sharp drop between August and the first half of September, ending just above $0.4. 

The $0.4 of mid-September is not that far from the all-time low of October 2020, and although it rose back up to above $0.5 in October, the current values are still 92% below the highs touched during the last bullrun. 

So even excluding the absurd initial bullrun, CRV’s price went from $0.33 to $6.5, but only to return to $0.4. The current value is not far from those lows.

The Curve DAO project

Curve DAO is the DAO of the Curve project, and CRV is its governance token. 

Curve Finance is in fact a DEX, or decentralized exchange, although with some advanced features that make it a little different from the others. 

It had a big success just in 2021, with TVL going from $1.4 billion to $24 billion in one year. 

However, 2022 was a real bloodbath for Curve Finance, whose TVL plunged to $3.7 billion. Granted, $3.7 billion is definitely more than the starting $1.4 billion, but it is also 84% less than the highs. 

Add to that the further collapse in 2023, with the current LTV falling to $1.8 billion, which is not much more than the late 2020 LTV. 

It is true that the initial TVL in February 2020 was only $9,000, but with the launch of the CRV governance token in August 2020 it already rose to $1 billion. 

It is as if Curve Finance is going back to where it started when CRV was launched. 

Curve’s problems

Aside from the collapse of the market value of the CRV token, it is precisely the Curve project that has also had many problems in the past two years. 

The first big problems occurred about a year ago, when it lost 23% in one fell swoop with a Short Squeeze. 

Then in July this year with a hacker attack tokens worth a total of $70 million were stolen on the Curve Finance platforms, causing users to flee. 

Suffice it to say that at its peak Curve Finance’s TVL was more than double that of Uniswap, while now it is less than half. 

For a time Curve Finance’s DEX was by far one of the most widely used, while now it has dropped to 11th place for TVL among DeFi protocols. 

This was a real collapse, due both to the bursting of a giant bubble and also to the various technical problems of which the hack was but the final act. 

The future of Curve

It is difficult to say to date what the future of Curve’s DeFi project might be. 

However, there does not seem to be a basis for a major revival, especially in the short term, while the evolution in the long term is still uncertain. 

Moreover, it is somewhat the whole of DeFi that has suffered in the past two years, particularly since the implosion of Terra/Luna onward. 

In fact, it is not only Curve that is suffering, but PancakeSwap and other DEX, yield farming programs such as Convex Finance, decentralized derivatives platforms such as dYdX, while Lido, Maker, Uniswap, Aave, and lending platforms are also suffering greatly. 

Curve’s future is inextricably linked to the future of DeFi itself, and in particular to market trends that may bring many users back to platforms based on decentralized finance protocols. 

The problem is that new, perhaps more competitive ones may emerge in the meantime, and thus the space for the old protocols may paradoxically shrink further.