New push for on‑chain forex: Curve has introduced FXSwap, an AMM model that combines concentrated liquidity and external refuel — an additional capital flow — designed to compress spreads on non-USD pairs and attract volumes from traditional finance to DeFi. The initiative, announced on September 3, 2025, by Curve and reported by specialized press Bitcoin News, aims to strengthen historically thin markets on blockchain.
According to on-chain data available as of September 3, 2025, the initial integrations and network logs show an increase in activity on dedicated pools: more significant transactions and operational requests from third-party projects were observed in the first 24 hours. Industry analysts note that the initial interest is primarily focused on stablecoin denominated in EUR and GBP, where the on-chain depth was historically more limited.
Why This Development Matters Now
Fragmented liquidity: many on-chain FX pairs have reduced depth, so large trades tend to migrate towards CEX/OTC to minimize market impact.
Spread and slippage often high on low volatility assets, such as some non-USD stablecoins, with quotes that do not always reflect the theoretical mid-price.
Institutional demand is growing for stablecoins and tokenized assets, while the on‑chain infrastructure is still in the process of operational refinement.
Transparency and on-chain settlement offer a competitive advantage in a regulatory environment that is becoming increasingly stringent.
Curve: how FXSwap works
FXSwap combines three operational components, coordinated to increase efficiency and price consistency.
Concentrated liquidity: capital is allocated around the market price to maximize density in the areas where actual trades occur.
External refuel: an additional capital flow fuels the pool near the mid-price, helping to maintain depth and tight spreads even during periods of reduced volatility.
Risk-limited management: dedicated operators reallocate liquidity following rules that prevent rebalancing when conditions could generate losses for the pool.
The expected outcome is a denser order book around the reference rate and quotes more aligned with the on-chain fair value, especially for low volatility pairs. In this context, the quality of the oracles and the timeliness of interventions will play a significant role.
What It Solves Compared to Previous Models
Thin liquidity on on‑chain FX pairs, particularly those not tied to the USD, resulting in execution difficulties for large sizes.
Price inefficiencies due to the dispersion of capital and passive market making, which tends to dilute depth in less traded ranges.
Barriers for liquidity providers: participation is often limited in the absence of active management; FXSwap introduces managers and anti-loss constraints to coordinate rebalancing.
Practical Effects for Traders and Liquidity Providers
Trader: tighter spreads and smaller deviations compared to the on-chain market rate, with greater predictability of implicit costs.
Liquidity Provider: potentially more stable fees due to volumes concentrated in specific ranges and a reduced need for continuous repositioning.
Pool manager: tools to optimize positioning and costs, with automatic thresholds that block unfavorable rebalancing during stress phases.
Which assets can benefit from it
Non-USD Stablecoin (EUR, GBP, JPY, etc.): more efficient trades and reduced slippage in the most frequently traded price areas.
Fiat currencies on‑chain: a better alignment with spot rates, especially when depth is visible and persistent.
Real-world tokenized assets (e.g., gold): greater continuity of quotation in the most traded price ranges, with less deviation from the reference.
Expected Market Impact
Price competition: AMMs equipped with external refuel can bring quotes and spreads closer to professional standards, even on less liquid pairs.
Return of volumes from centralized order books or OTC exchanges to on-chain protocols, where the depth becomes competitive.
Accessibility: greater transparency and visible depth, useful for both retail and institutional investors who require traceability.
Risks, limits, and points to monitor
Dependence on refuel: a reduction in the flow of external capital could thin the depth of the pool and widen the spreads.
Risk related to oracles: errors in the price feed can lead to rebalancing in less efficient zones, moving the pool away from the fair value.
Network congestion: high transaction costs and latency can hinder maintaining the optimal range at key moments.
Smart contract risk: as in every AMM, the security of the contracts and the related audits remain fundamental.
FX Regulation: the regulatory framework on currencies and tokens representing real assets is constantly evolving; it is advisable to monitor regulatory updates and publications from national authorities (ESMA, FCA, etc.).
Numerical Example (Hypothetical Simulation)
Purely illustrative scenario for an EUR-stablecoin pair, useful to illustrate the magnitude of implicit costs.
Trade: 1,000,000 tokenized EUR against USD-pegged stablecoins.
AMM with concentrated liquidity and refuel: an operating spread of 0.10% is hypothesized with slippage contained around the mid-price.
Less deep alternative market: a spread of 0.40% and greater slippage for the same notional is assumed.
Estimated impact on execution cost:
AMM: approximately 1,000 EUR of implicit cost.
Alternative with limited depth: approximately 4,000 EUR of implicit cost.
Note: the values are for illustrative purposes; actual results depend on factors such as depth, volatility, fees, and market conditions at the time of execution. It should be noted that the final efficiency is also influenced by the quality of range management.
AMM vs Orderbook vs OTC: key differences
AMM with refuel: offers programmable liquidity and on-chain transparency, with competitive spreads when the refuel is active and properly sized.
Orderbook CEX: usually ensures greater depth on major pairs, while being less transparent about inventories and flows.
OTC: allows for customized pricing and reduces market impact for substantial blocks, but offers less transparency and relies on bilateral agreements. For institutional scenarios, OTC often remains the preferred solution for very large blocks.
State of Adoption and Integrations
According to recent public communications, FXSwap has been integrated into the main deployment platforms of Curve and some third-party projects have announced the first integrations. An example is Yield Basis which has indicated compatibility with the new pools, a sign that the functionality is beginning to enter operational workflows. Monitoring updates on official repositories and Curve changelogs allows tracking of adoption in real-time.
Metrics to Watch
Average depth at ±10/25/50 bps from the mid-price on non-USD pairs.
Real spreads monitored through the main on-chain aggregators.
Share of FX on‑chain volumes compared to CEX/OTC for the same pairs.
Net yield of LPs, net of fees and rebalancing costs.
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Curve launches FXSwap: on-chain forex aims for tighter spreads and deep liquidity
New push for on‑chain forex: Curve has introduced FXSwap, an AMM model that combines concentrated liquidity and external refuel — an additional capital flow — designed to compress spreads on non-USD pairs and attract volumes from traditional finance to DeFi. The initiative, announced on September 3, 2025, by Curve and reported by specialized press Bitcoin News, aims to strengthen historically thin markets on blockchain.
According to on-chain data available as of September 3, 2025, the initial integrations and network logs show an increase in activity on dedicated pools: more significant transactions and operational requests from third-party projects were observed in the first 24 hours. Industry analysts note that the initial interest is primarily focused on stablecoin denominated in EUR and GBP, where the on-chain depth was historically more limited.
Why This Development Matters Now
Fragmented liquidity: many on-chain FX pairs have reduced depth, so large trades tend to migrate towards CEX/OTC to minimize market impact.
Spread and slippage often high on low volatility assets, such as some non-USD stablecoins, with quotes that do not always reflect the theoretical mid-price.
Institutional demand is growing for stablecoins and tokenized assets, while the on‑chain infrastructure is still in the process of operational refinement.
Transparency and on-chain settlement offer a competitive advantage in a regulatory environment that is becoming increasingly stringent.
Curve: how FXSwap works
FXSwap combines three operational components, coordinated to increase efficiency and price consistency.
Concentrated liquidity: capital is allocated around the market price to maximize density in the areas where actual trades occur.
External refuel: an additional capital flow fuels the pool near the mid-price, helping to maintain depth and tight spreads even during periods of reduced volatility.
Risk-limited management: dedicated operators reallocate liquidity following rules that prevent rebalancing when conditions could generate losses for the pool.
The expected outcome is a denser order book around the reference rate and quotes more aligned with the on-chain fair value, especially for low volatility pairs. In this context, the quality of the oracles and the timeliness of interventions will play a significant role.
What It Solves Compared to Previous Models
Thin liquidity on on‑chain FX pairs, particularly those not tied to the USD, resulting in execution difficulties for large sizes.
Price inefficiencies due to the dispersion of capital and passive market making, which tends to dilute depth in less traded ranges.
Barriers for liquidity providers: participation is often limited in the absence of active management; FXSwap introduces managers and anti-loss constraints to coordinate rebalancing.
Practical Effects for Traders and Liquidity Providers
Trader: tighter spreads and smaller deviations compared to the on-chain market rate, with greater predictability of implicit costs.
Liquidity Provider: potentially more stable fees due to volumes concentrated in specific ranges and a reduced need for continuous repositioning.
Pool manager: tools to optimize positioning and costs, with automatic thresholds that block unfavorable rebalancing during stress phases.
Which assets can benefit from it
Non-USD Stablecoin (EUR, GBP, JPY, etc.): more efficient trades and reduced slippage in the most frequently traded price areas.
Fiat currencies on‑chain: a better alignment with spot rates, especially when depth is visible and persistent.
Real-world tokenized assets (e.g., gold): greater continuity of quotation in the most traded price ranges, with less deviation from the reference.
Expected Market Impact
Price competition: AMMs equipped with external refuel can bring quotes and spreads closer to professional standards, even on less liquid pairs.
Return of volumes from centralized order books or OTC exchanges to on-chain protocols, where the depth becomes competitive.
Accessibility: greater transparency and visible depth, useful for both retail and institutional investors who require traceability.
Risks, limits, and points to monitor
Dependence on refuel: a reduction in the flow of external capital could thin the depth of the pool and widen the spreads.
Risk related to oracles: errors in the price feed can lead to rebalancing in less efficient zones, moving the pool away from the fair value.
Network congestion: high transaction costs and latency can hinder maintaining the optimal range at key moments.
Smart contract risk: as in every AMM, the security of the contracts and the related audits remain fundamental.
FX Regulation: the regulatory framework on currencies and tokens representing real assets is constantly evolving; it is advisable to monitor regulatory updates and publications from national authorities (ESMA, FCA, etc.).
Numerical Example (Hypothetical Simulation)
Purely illustrative scenario for an EUR-stablecoin pair, useful to illustrate the magnitude of implicit costs.
Trade: 1,000,000 tokenized EUR against USD-pegged stablecoins.
AMM with concentrated liquidity and refuel: an operating spread of 0.10% is hypothesized with slippage contained around the mid-price.
Less deep alternative market: a spread of 0.40% and greater slippage for the same notional is assumed.
Estimated impact on execution cost:
AMM: approximately 1,000 EUR of implicit cost.
Alternative with limited depth: approximately 4,000 EUR of implicit cost.
Note: the values are for illustrative purposes; actual results depend on factors such as depth, volatility, fees, and market conditions at the time of execution. It should be noted that the final efficiency is also influenced by the quality of range management.
AMM vs Orderbook vs OTC: key differences
AMM with refuel: offers programmable liquidity and on-chain transparency, with competitive spreads when the refuel is active and properly sized.
Orderbook CEX: usually ensures greater depth on major pairs, while being less transparent about inventories and flows.
OTC: allows for customized pricing and reduces market impact for substantial blocks, but offers less transparency and relies on bilateral agreements. For institutional scenarios, OTC often remains the preferred solution for very large blocks.
State of Adoption and Integrations
According to recent public communications, FXSwap has been integrated into the main deployment platforms of Curve and some third-party projects have announced the first integrations. An example is Yield Basis which has indicated compatibility with the new pools, a sign that the functionality is beginning to enter operational workflows. Monitoring updates on official repositories and Curve changelogs allows tracking of adoption in real-time.
Metrics to Watch
Average depth at ±10/25/50 bps from the mid-price on non-USD pairs.
Real spreads monitored through the main on-chain aggregators.
Share of FX on‑chain volumes compared to CEX/OTC for the same pairs.
Net yield of LPs, net of fees and rebalancing costs.
Stability of refuel during market stress phases.