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Curve Stablecoin Pool Outperforms Uniswap With Higher Volume Efficiency

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Nexo Partners with Bakkt for US Crypto Exchange and Yield Programs

TLDR:

  • Curve’s USDC/USDT pool processes 75% of Uniswap volume with only one eighth of the liquidity available.
  • Liquidity providers earn about 2.5% base yield on Curve compared with under 1% across Uniswap pools.
  • Curve’s stablecoin focused AMM concentrates liquidity near parity to increase capital efficiency.
  • Maximum boosted rewards can lift liquidity provider returns on Curve pools to about 5.5% APR.

New data reveals a sharp efficiency gap between Curve and Uniswap in stablecoin trading pools. A USDC and USDT pool on Curve processed major trading activity despite holding far less liquidity than similar Uniswap pools. 

The pool generated comparable trading volume while operating with only a fraction of the capital. The development has renewed focus on how automated market maker designs influence liquidity efficiency and returns.

Curve Stablecoin Pool Shows Higher Volume Efficiency Than Uniswap

Data shared on X indicates the USDC and USDT pool on Curve holds about $5 million in liquidity. Comparable pools on Uniswap V3 and V4 hold around $37 million combined.

Despite that difference, Curve recorded roughly $33 million in trading volume during the same period. Uniswap pools handled about $43 million in volume.

The comparison shows Curve processing nearly 75% of Uniswap’s combined volume while using about one eighth of the liquidity. That efficiency stems from Curve’s automated market maker design built for stablecoin trading.

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Curve’s system concentrates liquidity around tight price ranges for assets with similar values. Stablecoins such as USDC and USDT typically trade near parity.

Michael Egorov, the founder of Curve, commented on the data through X. He noted that the Curve pool outperformed comparable Uniswap pools in both utilization and annual yield.

Egorov also pointed out that average trading fees inside the Curve pool exceeded those in the comparable Uniswap V4 pool. The data suggests higher utilization of available liquidity inside Curve’s market structure.

Higher APR on Curve Stablecoin Pool Boosts Liquidity Provider Returns

Liquidity providers in the Curve pool also receive stronger base yields. Data shared by market analyst CredibleCrypto shows base returns around 2.5%.

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Comparable pools on Uniswap generate lower base yields. Uniswap V3 produces about 0.6% while Uniswap V4 returns around 0.95%.

The gap means Curve liquidity providers earn roughly 2.5 to five times more yield from base fees alone. That difference reflects higher trading activity relative to capital size.

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Additional incentives further increase potential returns on Curve. Liquidity providers can earn up to about 5.5% annual percentage rate with a maximum boost.

These boosts come from Curve’s reward structure tied to veCRV governance participation. The mechanism increases rewards for users who lock tokens and participate in governance.

The structure encourages long term liquidity commitments while raising effective yield for active participants. As a result, Curve maintains strong capital efficiency even with smaller pools.

The comparison between Curve and Uniswap highlights a broader design difference between automated market makers. Curve specializes in stable asset trading while Uniswap supports a wider range of tokens and markets.

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Crypto World

Spot Bitcoin ETFs Log Second Weekly Inflows in 5 Months, Ether ETFs Rebound

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Spot Bitcoin ETFs Log Second Weekly Inflows in 5 Months, Ether ETFs Rebound

US spot Bitcoin exchange-traded funds recorded their second consecutive week of net inflows, marking the first back-to-back weekly gains in five months.

Spot Bitcoin (BTC) ETFs attracted roughly $568.45 million in net inflows this week, according to data from SoSoValue. The products also posted positive flows of about $787.31 million the previous week, showing renewed investor appetite after several weeks of sustained outflows.

Before the recent turnaround, US spot Bitcoin ETFs endured a prolonged period of investor withdrawals, recording roughly $3.8 billion in cumulative outflows over a five-week streak.  The biggest weekly withdrawal during the streak occurred in the week ending Jan. 30, when spot Bitcoin ETFs recorded about $1.49 billion in net outflows.

Bitcoin ETFs see inflows for second consecutive week. Source: SoSoValue

Daily flows were mixed during this week. Spot Bitcoin ETFs recorded inflows of $458.19 million on Monday, followed by $225.15 million on Tuesday and a larger $461.77 million on Wednesday. The momentum reversed in the final sessions, with the funds seeing $227.83 million in outflows on Thursday and $348.83 million in redemptions on Friday.

Related: US Bitcoin ETFs Post $462 Million Inflows as BTC Tops $73K

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Ether ETFs see weekly inflows

US spot Ether (ETH) ETFs also recorded their second consecutive week of net inflows. The funds attracted roughly $23.56 million in net inflows for this week after posting $80.46 million in inflows the previous week, , marking their first back-to-back weekly gains since early October last year.

Before the rebound, spot Ether ETFs faced a sustained withdrawal streak, recording more than $1.38 billion in cumulative outflows across five consecutive weeks. The largest weekly outflow occurred during the week ending Jan. 23, when the funds recorded roughly $611 million in net redemptions.

Meanwhile, the funds saw mixed results throughout the latest reporting week. They recorded $38.69 million in inflows on Monday, followed by $10.75 million in outflows on Tuesday. Inflows returned on Wednesday with $169.41 million, but the momentum faded later in the week.

Related: Bitcoin Whales Shift Billions Into ETFs Like BlackRock’s IBIT

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Bitcoin ETFs match 15 years of gold ETF inflows in 2 years

In a Saturday post on X, Fernando Nikolić, Blockstream’s director of marketing, noted that Bitcoin ETFs have already matched roughly 15 years of cumulative inflows seen by gold ETFs in less than two years, despite gold having a decade-and-a-half head start in the ETF market.

Spot Bitcoin ETFs vs gold ETFs. Source: Fernando Nikolić

Nikolić added that the milestone occurred during a 46% Bitcoin drawdown and several months of negative price performance, arguing that institutional demand remained strong even amid market weakness.

“Anyone still arguing about whether bitcoin is ‘digital gold’ is wasting their breath,” he wrote. “Bitcoin isn’t trying to be gold. Bitcoin is making gold look slow,” he added.

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