Why StableSwap uses a different curve
The original StableSwap design addresses exchanges between assets expected to trade near a common value. A constant-sum rule offers an almost fixed price but can exhaust one reserve, while a constant-product rule continues quoting across a broad range with more price movement near balance. StableSwap combines features of the two: it is relatively flat around its intended relationship and becomes more restrictive as reserves become unbalanced. The amplification parameter changes this behavior. It is a pricing rule for a liquidity pool, not a mechanism that guarantees an issuer's solvency.
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What a broken peg does to the pool
Consider an illustrative pool holding two dollar-linked tokens when one loses market confidence. Traders may supply the weaker token and withdraw the stronger one, changing the pool's inventory. The curve adjusts the exchange price as that imbalance grows, but liquidity providers can still end up exposed to more of the unwanted asset. Collected swap fees must be weighed against that inventory loss. A label such as stable pool describes the intended relationship between assets; it does not establish that the relationship will survive a redemption or collateral failure.
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Curve includes more than pegged-asset trading
CryptoSwap's published design concentrates liquidity around an internal price scale that can move as market conditions change. Its update rules consider the cost of changing that scale relative to accumulated trading gains. This extends the approach to assets that need not maintain a fixed peg to one another. As a result, identifying a Curve position requires its actual pool design and parameters, not just the protocol name. Historical simulations in a whitepaper explain design experiments; their returns are not current quotes or forecasts for a live pool.
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The source notesEvidence & further reading2 sources
- StableSwap: efficient mechanism for Stablecoin liquidity Michael Egorov, 2019 · Primary source · accessed 2026-09-21
- Automatic market-making with dynamic peg Michael Egorov / Curve Finance, 2021 · Primary source · accessed 2026-09-21