Curve Finance has launched FXSwap, a new type of cryptopool specifically designed for foreign exchange and low-volatility trading pairs onchain.
Curve’s New AMM Design Aims to Bring Forex Markets Onchain
The implementation introduces a “refuel” mechanism where a stream of external funds maintains high liquidity density around the market exchange rate. This design ensures traders receive optimal pricing while liquidity providers earn fees from increased volume without active position management.
According to the team, this addresses a historic challenge where onchain liquidity for such assets has been thin, often pushing activity to centralized exchanges and over-the-counter (OTC) desks. FXSwap aims to make automated market makers (AMMs) a viable, large-scale source of liquidity for these markets.
A key feature is its managed approach to concentrated liquidity, combining efficient pricing with built-in loss protection. If a rebalancing action would cause a loss, it is not executed. Dedicated pool managers can optimize this process, working like market makers to maintain liquidity and control costs.
The upgrade significantly expands the range of assets that can be supported with deep onchain liquidity, including non-USD stablecoins and real-world assets like gold. “At a surface level, this update might look like a small change, but the broader implications are massive,” Curve’s team told Bitcoin.com News on Wednesday.
The team further added:
“It can transform how we think about liquidity in DeFi, shifting the balance away from orderbooks and centralized desks towards AMMs as the main source of liquidity for all types of assets. Not only that, it expands the range of assets and markets that can be supported on-chain and makes LPing accessible to a much wider audience.”
FXSwap is accessible across all Curve deployments, with projects like Yield Basis already set to integrate it. This development marks a major step in shifting liquidity for diverse assets from order books to AMMs.
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Curve Finance Debuts New Pool for Foreign Exchange Trading
Curve Finance has launched FXSwap, a new type of cryptopool specifically designed for foreign exchange and low-volatility trading pairs onchain.
Curve’s New AMM Design Aims to Bring Forex Markets Onchain
The implementation introduces a “refuel” mechanism where a stream of external funds maintains high liquidity density around the market exchange rate. This design ensures traders receive optimal pricing while liquidity providers earn fees from increased volume without active position management.
According to the team, this addresses a historic challenge where onchain liquidity for such assets has been thin, often pushing activity to centralized exchanges and over-the-counter (OTC) desks. FXSwap aims to make automated market makers (AMMs) a viable, large-scale source of liquidity for these markets.
A key feature is its managed approach to concentrated liquidity, combining efficient pricing with built-in loss protection. If a rebalancing action would cause a loss, it is not executed. Dedicated pool managers can optimize this process, working like market makers to maintain liquidity and control costs.
The upgrade significantly expands the range of assets that can be supported with deep onchain liquidity, including non-USD stablecoins and real-world assets like gold. “At a surface level, this update might look like a small change, but the broader implications are massive,” Curve’s team told Bitcoin.com News on Wednesday.
The team further added:
FXSwap is accessible across all Curve deployments, with projects like Yield Basis already set to integrate it. This development marks a major step in shifting liquidity for diverse assets from order books to AMMs.