Swerve vs Curve

If the past few days in the market have been any indicator, people are starting to show signs of disillusionment with the recent wave of DeFi forks. Some of the most popular DeFi forks such as SWRV, CREAM, and SUSHI are down more than 30% over the past seven days, with some even falling as much as 80%. It's been an absolute bloodbath.

But is it justified?

While many DeFi forks are uninspired and resemble money grabs rather than genuine competition, a handful of forks were founded upon a legitimate thesis. One of which being Swerve, which I’ll focus on for the remainder of this piece.

What the Fork is Swerve?

Announced on September 3, Swerve is a fork of Curve - an automated market maker (AMM) optimized for swaps between assets price-stable with one another like stablecoins. The motivation for launching Swerve grew from controversy surrounding the launch of Curve’s governance token CRV in August. Leading up to the launch, Curve was a DeFi darling with widespread support from the DeFi community. However, due to a poorly executed launch involving accusations of a pre-mine, goodwill surrounding the project slowly began to erode. This goodwill was even further eroded when in an attempt to counteract Yearn’s 50%+ voting power in the Curve DAO, Curve’s founder locked up a large portion of his CRV tokens in the DAO giving him 79% of the voting power. While all this was happening the CRV token price slowly bled with little relief due to an extremely aggressive inflation schedule and large fully diluted supply that even still values the project in the high single digit billions of dollars.

In short, trust between the community and the Curve team was dwindling.

With SushiSwap having launched in the background, providing inspiration for community led forks with fairer token distribution and governance, a pseudonymous team forked Curve to address the problems seen with the project. The pitch was as follows: