Curve Unveils Forex Swap: A New Era for Cross-Border Trading

Curve's Head of Business Development, haowi.eth, announced an upcoming update on X: Forex Swap. This new feature, as outlined in Curve founder Michael Egorov's speech at TOKEN2049 titled "Stablecoin Swaps: From Arbitrage to Forex," is designed to revolutionize cross-border exchange.

Curve's 3pool (USDT-DAI-USDC), launched in 2020, addressed the need for users in different markets to exchange their stablecoins. By implementing a "leveraged version of Uniswap v2," Curve tackled the pricing discrepancies between pegged assets. These differences stem from market demand, underlying structural variations, and liquidity constraints. Competitors often overlook this issue.

Over the years, Curve has effectively amassed liquidity for pegged assets. However, this doesn't address the pricing challenges of unpegged assets. Curve's innovative Stable Swap solution, leveraging algorithmic automatic arbitrage, creates a concentrated liquidity pool for AMMs based on unpegged assets.

Curve will use the crvUSD system to mint synthetic currencies, including crvEUR, crvCNH, and others. A portion of the interest earned from this minting module will be allocated to synthetic stablecoin pools. LPs can receive both trading fee rebates and lending interest, allowing them to achieve significantly better forex market-making returns than traditional methods.

Simulations demonstrate that for equal trading volume, Uniswap v2 would result in a 100% slippage rate. Curve's Stable Swap, while minimizing slippage to under 1%, fails to meet the demands of forex volatility. Curve v2 Cryptoswap, with its 30% slippage rate, pales in comparison to the new Forex Swap structure, which promises slippage below 2%.