Guide: Providing Liquidity on Curve Finance

Lido -

Curve Finance is an AMM/DEX built around stablepair exchange with low fees and slippage. Curve Finance uses liquidity pools to facilitate peer-to-peer trades, rewarding liquidity providers with a share of trading fees and additional rewards to encourage this. As a non-custodial DeFi protocol, you maintain full control of your tokens when trading on Curve.

 

Curve Finance has a highly liquid stETH/ETH market allowing ETH stakers with Lido to swap between stETH and ETH in highly-efficient manner.

 

In this guide, you'll learn how to provide liquidity to the stETH/ETH market on Curve, covering the following topics:

  • Providing liquidity in the Curve stETH pool and receive pool trading fees in CRV.
  • Retaining exposure to stETH to earn staking rewards.
  • Unstaking your stETH.

 

How does Curve Finance work?

The stETH pool is a liquidity pool that contains stETH and ETH. Users can interact with these pools to purchase stETH or ETH with low slippage. Any trading fees from transactions that take place within this pool are paid out to liquidity providers in the form of CRV.

 

Users who provide their liquidity to the stETH/ETH pool on Curve Finance will receive LP tokens in return. These LP tokens can then be staked into the Curve gauge to receive trading fees in CRV.

 

Why provide liquidity on Curve Finance?

Without liquidity pools for stETH, users cannot efficiently swap their stETH for ETH. This swapping between stETH and ETH effectively unstakes ETH from the Lido contract. Without liquidity pools, stETH holders need to go through the Ethereum withdrawal process to unstake, which may face slight delays depending on withdrawal queues.

 

To incentivize liquidity for stETH, liquidity providers will be rewarded for providing their tokens into the Curve liquidity pool. In this way, liquidity providers are incentivized to keep Lido liquid.

 

Guide: Providing liquidity on Curve Finance

How do I provide liquidity into Curve?

  • Visit curve.fi/#/ethereum/pools/steth/deposit and connect your wallet.
  • Provide liquidity in the Curve stETH pool by clicking “Deposit & stake in gauge”.
  • Choose the proportion of ETH/stETH to stake.

 

Once confirmed you will receive LP tokens in return and effectively become a Curve Finance liquidity provider (LP). These LP tokens should be automatically deposited into the gauge, and you will start receiving trading fees in CRV (base APY %) in real time.

 

 

When you deposit stETH to Curve, your tokens are split between ETH and stETH, with the precise balances fluctuating constantly due to price trading. This is done automatically and does not affect your share of the LDO distribution.

 

If your stETH is deposited but not yet staked, choose "Stake LP Tokens". Choose the amount of stETH/ETH LP tokens you want to stake. This can be unstaked anytime.

 

Please note that when you stake your LP tokens - steCRV - using gauge, they will no longer be visible in your Metamask wallet. They will be visible again upon unstaking.

 

How do I claim my rewards?

Every time someone trades on this Curve pool you will receive trading fees in CRV. They are accrued automatically every trading transaction and you do not need to do anything here.

To claim your rewards:

  • Visit the Withdraw page.
  • Here you can choose to either "Withdraw" or "Unstake" your tokens. To exit the pool entirely, click “Withdraw". Upon doing so you will receive your rewards and withdraw your tokens from Curve back to your chosen Ethereum wallet.

 

How do I withdraw stETH from Curve

Curve allows you to unstake and withdraw at any time, in the token of your choice. When unstaking from gauges you effectively unstake your stETH so you no longer earn steCRV tokens.

  • Unstake: To no longer stake your stETH in a Curve gauge to earn fees and additional steCRV LP tokens.
  • Withdraw: To withdraw your tokens from Curve to your wallet.

 

After unstaking your tokens you can now withdraw them from Curve.

  • To exit the pool entirely, click “Withdraw and claim”. Upon doing so you will receive your rewards and withdraw your tokens from Curve back to your wallet.
  • Fill in the total amount of tokens you wish to withdraw (share of liquidity) or the precise token amounts (in ETH and stETH). You can also choose the combination of tokens to withdraw to your wallet - the split between ETH and stETH.

 

Upon confirmation of withdrawal using your Ethereum wallet, your tokens will be withdrawn from Curve to your wallet.

 

Frequently Asked Questions

What is stETH?

stETH is Lido's liquid staked Ethereum token. By holding stETH, you earn network rewards from Ethereum validator activities.

 

Why should I deposit my stETH to Curve Finance?

By depositing your stETH into Curve Finance and acting as a liquidity provider you earn a share of all trading fees on the stETH/ETH pair on Curve Finance.

 

Are there any risks to being a liquidity provider on Curve?

As with any DeFi protocol, there are a number of risks you need to be aware of when acting as an LP on Curve Finance. For a full overview of risks, check out 'Curve stETH Risks'.

 

What’s Next?

There are many plans for stETH to be used in a variety of DeFi protocols in the future such as lending protocols, farming strategy protocols, aggregators, and many more to come. These are outlined in more detail here: Possible DeFi protocol integrations with Lido and their respective incentives.

 

We highly encourage users to submit their proposals on the Lido forums to share their ideas to the community.