3 reasons why the price of Curve DAO Token (CRV) tripled in one week

In the past two weeks The entire DeFi sector has been on a strong uptrend, and many of the top tokens by market cap have rallied double and triple digits.

Curve DAO’s governance token, CRV, performed well, from a low of $ 0.54 on Jan 11 to a 2021 high of $ 1.78 on Jan 17th.

4-hour chart of the CRV / USDT pair. Source: TradingView

Three reasons for this recent surge in CRV volume and price are: A new collaboration with the Yearn.finance (YFI) ecosystem, positive regulatory developments in the US and an increase in engagement result in an overall value for the platform.

Cooperation with Yearn.finance

3 reasons why the price of Curve DAO Token (CRV) tripled in one week
3 reasons why the price of Curve DAO Token (CRV) tripled in one week

CRV’s remarkable increase in business volume began on January 14th according to Yearn.finance creator Andre Cronje Tweet a GIF that said:

“Curve.fi, in cooperation with Yearn.Finance, presents the creation of pools without permission. Stablecoin pools with 3 clicks. Crv.finance “.

Just like in the days when an integration of Chainlink (LINK) or an announcement of a partnership would cause an immediate increase in volume and price, Cooperations with YFI have tended to lead to sharp breaks in DeFi token prices. Take for example Cream Finance and SushiSwap, They recovered by over 100% following the announcements of the Yearn.finance partnership.

CRV’s trading volume rose from $ 59 million to $ 350 million after Cronje’s tweet and a Tweet An update on the progress of the collaboration followed on January 15, which read: “Crv.finance updated; pool creation without permission has been added. Anyone can create curve pool which can be changed to DAI, USDC or USDT.”

This brought up the 24 hour trading volume USD 478 million and raised the price to USD 1.23.

CRV price versus reported trading volume. Source: The tie

Crypto-friendly regulation creates opportunities for Curve

A second reason the price of CRV has more than tripled since early 2021 is due to the recent announcement of stable coins released by the Office of the United States Currency Auditor.

According to the OCC Banks will be able to “use new technology, including INVNs and associated stablecoins, to perform bank-approved functions such as payment activities”. Banks will shortly be able to use various blockchain platforms for transactions with stablecoins and provide custody services for these assets. This means that a reliable stablecoin ecosystem and oracle provider is needed.

The platform Curve DAO is one of the largest decentralized stablecoin exchanges that uses an automated market maker (AMM) to manage liquidity. If this change occurs, more people may consider the platform as the preferred option.

Increased user activity and Total Locked Value Drive fundamentals

A key factor in the success of a crypto project is the engagement of your community. With CRV, this is represented by metrics such as TVL (Total Value Locked) on the platform and the daily transaction volume.

Total value locked in Curve.Finance. Source: Defi Pulse

The defipulse data shows that The TVL in Curve recorded a significant increase from January 4th after staying relatively flat all December.

Curve.finance also saw a steady increase in the total daily transaction volume on the platform, as shown in the table below from Dune Analytics.

Daily volume in Curve.fi. Source: Dune Analytics

Another positive development for Curve was the January 17th announcement that “cross-asset swaps via Synthetix.io are now active”. This sparked another wave of high volume trading and hours after the announcement, CRV hit its 2021 high of $ 1.78.

As the total set in Curve hits new highs and daily volume increases, future collaborations like this one are likely to meet with similar enthusiasm.

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