Curve Finance’s rewards may be low now, but here’s the BUT of it all

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Late­ly, Curve Finance [CRV] has found it chal­leng­ing to offer its par­tic­i­pants more rewards in liq­uid­i­ty incen­tives. The on-chain liq­uid­i­ty project, which once sup­plied rewards at a val­ue of $3.7 mil­lion in Jan­u­ary 2022, is now strug­gling, accord­ing to Dune Ana­lyt­ics.

At press time, liq­uid­i­ty incen­tives on the Curve pool were worth just $480,700. The afore­men­tioned val­ue was a fur­ther decline from what it was worth at the close of Sep­tem­ber. Over the past few weeks, Curve has not been able to account for the decline in the same.

In fact, the liq­uid­i­ty incen­tives this year have been far off the fig­ures of $616.5 mil­lion record­ed in the sec­ond year of launch.

Source: Dune Analytics

Not the only one involved

Besides the liq­uid­i­ty drop, Dune Ana­lyt­ics also report­ed a fall in the CRV emis­sion rate. As of 30 Sep­tem­ber, the CRV emis­sions lock rate was 61.3%. Fast for­ward to the time of this writ­ing, and the emis­sion rate had fall­en to 54.9%. This meant that the assets in liq­uid­i­ty pools were not pro­vid­ing enough incen­tives. Hence, the decline. 

At the same time, CRV did not show any recov­ery prospects on the charts, espe­cial­ly as the entire cryp­to-mar­ket had not retired the pre­vail­ing bear sentiment.

Source: Dune Analytics

On the brighter side, CRV did not fail to hold on to its Total Val­ue Locked (TVL) position. 

At the time of this writ­ing, Curve’s TVL was $6.06 bil­lion, accord­ing to DeFi Lla­ma. This TVL rep­re­sent­ed a 0.49% hike from the fig­ure record­ed 24 hours ago. In fact, a 7.14% uptick has been seen in the last 30 days. Sim­ply put, the health of CRV’s smart con­tracts is good.

Source: DeFi Llama

How­ev­er, it hasn’t been all good for CRV, despite the TVL status. 

Accord­ing to Coin­Mar­ket­Cap, CRV was trad­ing at $0.89 at press time, with the alt­coin hav­ing fall­en by 3% with­in a 24-hour win­dow. Need­less to say, the mar­ket cap and vol­ume fol­lowed suit too. Could this mean that traders have been selling?

Here’s what’s happening

Look­ing at the four-hour chart, it seemed that CRV traders were sell­ing off the alt­coin. The Mov­ing Aver­age Con­ver­gence Diver­gence (MADC) revealed the same too. In fact, accord­ing to the MACD, CRV buy­ers did not seem to have strong momen­tum, espe­cial­ly as the buy­ing momen­tum (blue) was below the histogram.

Sim­i­lar­ly, the Direc­tion­al Move­ment Index (DMI) also agreed. Based on the DMI, CRV is like­ly going to stay bear­ish for a while, con­sid­er­ing that the Aver­age Direc­tion­al Index (yel­low) is mov­ing in a sim­i­lar direc­tion with the neg­a­tive DMI (red) at 23.05. Ergo, it might be inevitable to avoid a fur­ther down­trend on the charts.

Source: Trad­ingView

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