Curve Finance is a decentralized exchange (DEX) specializing in stablecoin swaps with minimal fees and slippage. By leveraging liquidity pools, Curve enables peer-to-peer trading while rewarding providers with a share of transaction fees and additional incentives. This non-custodial protocol ensures users retain full control of their assets.
One of Curve’s most liquid markets is the stETH/ETH pair, offering Lido-staked ETH (stETH) holders efficient swaps between stETH and ETH. This guide explains how to supply liquidity to this pool, covering:
- Earning trading fees and CRV rewards
- Maintaining stETH staking rewards
- Unstaking stETH
How Curve Finance Operates
The stETH pool is a liquidity pool containing stETH and ETH, allowing low-slippage trades between the two assets. Liquidity providers (LPs) earn CRV tokens from trading fees generated within the pool.
When users deposit assets into Curve’s stETH/ETH pool, they receive LP tokens representing their share. These tokens can be staked in Curve’s gauge to earn CRV fees.
Benefits of Providing Liquidity
Liquidity pools are essential for seamless stETH/ETH swaps, bypassing Ethereum’s withdrawal queues. LPs are incentivized to maintain pool depth, ensuring Lido remains liquid. Rewards include:
- Trading fee shares (paid in CRV)
- Base APY from staking
- Continued stETH staking rewards
Step-by-Step: Adding Liquidity to Curve
1. Depositing Assets
- Navigate to Curve’s stETH pool.
- Connect your Ethereum wallet (e.g., MetaMask).
- Click “Deposit & stake in gauge”.
- Select your ETH/stETH allocation ratio.
Upon confirmation, you’ll receive LP tokens, which are automatically staked in the gauge to start earning CRV rewards.
2. Managing LP Tokens
- Staked LP tokens (steCRV) temporarily disappear from MetaMask but reappear upon unstaking.
- Unstake anytime to reclaim tokens without affecting LDO distributions.
3. Claiming Rewards
CRV fees accrue automatically. To withdraw:
- Visit the Withdraw page.
- Choose “Withdraw” to exit the pool or “Unstake” to stop earning fees.
- Select your preferred token split (ETH/stETH) and confirm the transaction.
FAQ
What is stETH?
stETH is Lido’s liquid staking token, accruing Ethereum validator rewards automatically.
Why deposit stETH on Curve?
LPs earn trading fees from the stETH/ETH pair while maintaining staking rewards.
What risks exist?
Potential risks include smart contract vulnerabilities and impermanent loss. Review Curve’s risk documentation for details.
Future Opportunities
stETH integration is expanding across DeFi, including lending protocols and yield aggregators. Propose new ideas via Lido’s research forum.
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