Will DeFi Curve Clone Swerve Finance Lure More Liquidity?

This week has been filled with the likes of Sushi, Kimchi, Hotdog, and Pizza, half of which have pumped and dumped back into obscurity. The latest copycat to appear on the now highly contentious DeFi scene is a Curve clone called Swerve Finance.

Honest Hard Working Farmers Wanted

Swerve claims to be a fair launched liquidity pool on Ethereum, which has been designed for efficient stablecoin trading with full token distribution allocated to liquidity providers. Sound familiar? Well, that’s because it is. Swerve is another DeFi clone taken from the Curve Finance protocol.

Introducing Swerve, a fork of $CRV with 100% of the token distribution allocated to liquidity providers. $SWRV is a fair deployment for all honest hard working farmers in #DeFi.

Launching soon, stay tuned. https://t.co/9WxhiBCzRV

— Swerve Finance (@SwerveFinance) September 3, 2020

The website shows the breakdown of token distribution but begins with this;

“There’s no fake-out deployment, no questionable pre-mining, no founder controlling majority of the governance vote, no suspect team proposals, no 30% allocation to ‘shareholders’, no team allocation, no decades long distribution, none of it.”

It is pretty easy to allocate nothing to the team or developers when no work has been done, and the smart contracts have simply been copied from another platform with a few tweaks. Anyone with a little technical knowledge in smart contact deployment can do it, which is why so many of them have appeared recently. When asked if Curve’s code was proprietary, Swerve replied:

“We have written independent Solidity code that interacts with Curve’s contracts essentially as an on-chain API via delegation. Any reused software in Swerve is MIT licensed.”

Just like Curve, liquidity providers get rewarded in ySWRV tokens, which can be staked in a Swerve DAO to earn SWRV. There will be a total supply of 33 million tokens, redistributed amongst liquidity providers, and only one Y pool to begin with.

The first two weeks will have a larger distribution of 9 million tokens, with the remainder getting released over the next six years.

Another Pump and Dump?

Initial responses have been positive, but there is nothing stopping whales loading up during the initial phases, pumping the token sky high, and then dumping on everyone who has entered the ecosystem afterward.

There was no time frame for the launch of Swerve, and its token was not listed on Uniswap at the time of writing. Following the likes of Sushi, Kimchi, and the now failed Hotdog, it would be fair to say that any of these clone DeFi projects remain extremely high risk.

The article was first published on Sep 4, 2020.