Slippage Comparison: Curve v2 Stableswap vs Uniswap v3 Concentrated Liquidity

Ultra-low slippage for pegged assets: Uses a hybrid Stableswap invariant (e.g., crvUSD, 3pool) to maintain near-constant price within a tight band. This matters for large stablecoin swaps (e.g., $1M USDC to DAI) where slippage is often <0.01%.

Higher LP yields for correlated assets: Liquidity is concentrated around the peg (e.g., 0.99-1.01), maximizing fee income per dollar deposited. This matters for protocols like Frax Finance or Liquity that need deep, efficient liquidity for their stablecoins.

Customizable liquidity ranges: LPs can set exact price bounds (e.g., ETH/USDC from 1800-2200), concentrating capital and minimizing slippage within that range. This matters for active market makers and protocols like Gamma Strategies managing volatile pairs (ETH/altcoins).

Variable fees based on volatility: Pools can implement multiple fee tiers (0.01%, 0.05%, 0.3%, 1%). This matters for pairs like ETH/USDC where LPs are compensated for impermanent loss risk, allowing the market to price liquidity for different asset classes.

• Stablecoin/pegged asset swaps (e.g., crvUSD, FRAX, LUSD).
• Maximizing yield on correlated assets.
• Protocol-owned liquidity needing predictable, low-slippage exits.

• Volatile/correlated pairs (e.g., ETH/BTC, MEME coins).
• Active LP strategies with defined market views.
• Institutional market making requiring granular control (via Panoptic or Arrakis Finance).

Minimal slippage for like-kind assets: The Stableswap invariant is optimized for assets pegged to the same value (e.g., USDC/USDT). Slippage is often <0.01% for large swaps within the pool's balance, making it the de facto standard for stablecoin DEXs like Curve Finance and Frax Finance.

Dynamic concentration around peg: The v2 invariant automatically concentrates liquidity around the current price (or 1:1 peg), reducing slippage without requiring active management. This is ideal for correlated assets like stETH/ETH or other derivative pairs.

Customizable slippage tolerance per position: LPs can set exact price ranges (e.g., ETH/USDC between $3,000-$4,000), providing ultra-low slippage within that band. This allows protocols like Arrakis Finance and Gamma Strategies to build optimized vaults for specific market conditions.

Earns fees from price movement: Concentrated positions earn more fees when the price trades within their range, directly compensating for impermanent loss. This creates a market for sophisticated LP strategies using tools like Charm Finance and Panoptic.

High slippage outside the peg: The model breaks down for unrelated assets (e.g., ETH/AAVE). Swaps experience significantly worse slippage compared to Uniswap v3, making it unsuitable for general trading pairs.

Liquidity fragmentation across ticks: Capital is spread thinly across many price ranges, increasing slippage for large orders that cross multiple ticks. Requires active management via rebalancing bots or vaults, adding operational complexity.

Near-zero slippage for correlated assets: The StableSwap invariant is optimized for assets like USDC/DAI/USDT, maintaining a tight 0.01-0.03% fee pool. This matters for large stablecoin swaps and low-volatility pegged assets, where price should remain ~1:1.

Automated fee scaling with volatility: The internal oracle dynamically adjusts pool fees (e.g., from 0.01% to 0.04%) based on recent price movements. This matters for protecting LPs during market stress while keeping fees competitive during calm periods.

Active range management minimizes slippage: LPs concentrate capital within custom price ranges (e.g., ETH between $3,000-$3,500). This provides deeper liquidity at the current price, reducing slippage for large trades in trending markets like ETH/USDC.

Transparent, calculable price impact: The constant product formula within a concentrated range allows traders to precisely calculate slippage before executing. This matters for algorithmic traders and MEV bots requiring deterministic execution costs.

High slippage for volatile pairs: The StableSwap invariant creates extreme price impact when assets diverge (e.g., a 5% price move can cause >10% slippage). Avoid for trading ETH/BTC or non-pegged assets.

Liquidity fragmentation increases slippage risk: If LPs mis-set their price ranges or fail to adjust them, liquidity can become "inactive," leading to higher slippage for traders. This demands active management, unlike Curve's set-and-forget pools.