Crypto Quill

Curve Finance, a leading decentralized exchange (DEX) for stablecoins and wrapped tokens, has announced its plans to integrate ZetaChain, a layer-1 blockchain that supports native Bitcoin and cross-chain transactions. This will allow Curve users to trade Bitcoin and other assets across 30 different networks without wrapping or bridging, opening up new possibilities for liquidity and interoperability in the decentralized finance (DeFi) space.

What is ZetaChain and how does it work?

ZetaChain is a blockchain platform that aims to provide global access, simplicity, and utility across any blockchain. It uses a novel consensus mechanism called Proof-of-Connectivity (PoC), which rewards nodes for maintaining connections with other chains and validating cross-chain transactions. ZetaChain also supports Omnichain Smart Contracts, which are EVM-compatible smart contracts that can access data and assets on all chains.

One of the key features of ZetaChain is its support for native Bitcoin, which means that users can deposit and withdraw BTC directly from the ZetaChain network without using any intermediaries or wrappers. Wrappers are tokens that represent the value of another asset on a different blockchain, such as WBTC or renBTC on Ethereum. Wrappers introduce additional costs, risks, and complexity for users who want to use Bitcoin in DeFi applications.

ZetaChain solves this problem by introducing a new token standard called ZRC-20, which is an extension of ERC-20 that supports deposits from and withdrawals to connected chains. ZRC-20 tokens can be used and transacted on ZetaChain as if they were native tokens, enabling seamless interoperability and compatibility with existing DeFi protocols.

Why is Curve integrating ZetaChain?

Curve is a DEX that specializes in trading stablecoins and wrapped tokens, such as USDC, DAI, WBTC, and renBTC. Curve offers low slippage, high liquidity, and attractive yields for liquidity providers, making it one of the most popular DeFi platforms in the market. However, Curve also faces some challenges, such as high gas fees, limited scalability, and reliance on wrappers for cross-chain assets.

By integrating ZetaChain, Curve will be able to offer its users a new way to trade Bitcoin and other assets across multiple chains without wrapping or bridging. This will reduce the friction, costs, and risks involved in moving value across different networks, and unlock new sources of liquidity and utility for Bitcoin holders. Curve will also be able to leverage ZetaChain’s EVM compatibility and Omnichain Smart Contracts to deploy its existing Ethereum smart contracts on ZetaChain with minimal changes, creating a truly omnichain DEX that supports all chains, including even non-smart chains like the Bitcoin network.

What are the benefits for users and the DeFi ecosystem?

The integration of ZetaChain and Curve will bring several benefits for users and the DeFi ecosystem, such as:

• Native Bitcoin trading: Users will be able to trade Bitcoin natively, eliminating the need for wrapping or bridging, which can be costly, cumbersome, and risky. Users will also be able to access the liquidity and utility of Bitcoin on decentralized platforms, such as lending, borrowing, and yield farming, without compromising on security or decentralization.
• Cross-chain interoperability: Users will be able to swap any asset across 30 different networks in a single step, without using any intermediaries or centralized bridges. Users will also be able to use one wallet to experience all of crypto, without having to switch between different chains or applications.
• Low fees and high scalability: Users will be able to enjoy low fees and high scalability on ZetaChain, thanks to its PoC consensus and layer-1 architecture. Users will also be able to benefit from the composability and network effects of DeFi protocols on ZetaChain, which will enable new use cases and innovations.

The integration of ZetaChain and Curve is expected to launch in early 2024, after the completion of testing and auditing. The partnership represents a significant advancement for DeFi, as it will enable the first native Bitcoin trading in DeFi, and pave the way for more practical and powerful applications of interoperability and connectivity across the crypto space.