Crypto glossary
StableSwap curve
StableSwap is an AMM curve, introduced by Curve, built for assets that should trade near 1:1, such as stablecoins, offering low slippage around the peg.
The StableSwap invariant blends two formulas: a constant sum, which keeps the price exactly at 1:1, and a constant product, which ensures the pool never runs dry. An amplification parameter controls the mix. Near balanced reserves the curve behaves almost like a constant sum, so large swaps between USDC and USDT or between ETH and a staked ETH token barely move the price. As the pool becomes lopsided, it shifts toward constant product behaviour.
Curve Finance introduced the design in 2020, and it became the backbone of stablecoin and liquid staking token trading. Many other DEXs, including Balancer and several Solana venues, offer stable pools based on the same idea, and the depth of these pools is a common gauge of a stablecoin's health.
The curve assumes the assets really are worth the same. If one loses its peg, LPs end up holding mostly the failing token, as several pools did during the UST collapse and the USDC depeg. A high amplification setting magnifies that effect.
Example
A trader swaps 2 million USDT for USDC in a StableSwap pool and receives about 1,999,700 USDC, a far smaller loss than a constant product pool of the same size would cause.