CFMM by Curve for StableSwap (Torch Finance & Crouton Finance)

TL;DR: Curve Finance’s CFMM algorithm, known as StableSwap, enables low‑slippage stablecoin swaps. In 2024 the TON Foundation partnered with Curve, selecting Torch Finance and Crouton Finance to implement StableSwap on the TON blockchain.

Overview of Curve Finance and StableSwap#

Curve Finance is a decentralized exchange originally launched on Ethereum and later expanded to multiple blockchains. Its core technology is the Constant Function Market Maker (CFMM), a class of automated market makers that keep a fixed mathematical relationship between pool reserves. The StableSwap variant, introduced as a prototype in November 2019 by Mikhail Egorov, is optimized for assets with near‑identical prices such as stablecoins.

Key characteristics of StableSwap:

Low slippage for stablecoin pairs (e.g., $USDC/$USDT) because the algorithm behaves like a constant‑sum function near the 1:1 price point.
Capital efficiency: liquidity concentrates around the expected price, boosting returns for liquidity providers.
Reduced impermanent loss thanks to the tight correlation of pooled assets.

Curve’s native token, $CRV, launched in August 2020 and serves governance, liquidity‑provider rewards, and emission management.

Curve’s Partnership with TON#

In 2024 the TON Foundation announced a strategic collaboration with Curve to bring StableSwap‑based liquidity to the TON ecosystem. The partnership’s main goals are:

Building cross‑chain bridges that connect stablecoins ($USDT, $USDC) between TON and EVM networks.
Integrating TON projects into CrossCurve, a cross‑chain liquidity aggregator led by Mikhail Egorov.

To select implementation teams, an open contest attracted 70 teams. The winners were Torch Finance and Crouton Finance, each receiving $150,000 for audits and initial liquidity.

Torch Finance#

Torch Finance is a TON‑based DEX focused on low‑slippage swaps of assets with similar value. Founded in 2024, it issues the native token $TORCH.

Advantages

Emphasis on cross‑chain liquidity and stablecoin pools.
Integration with CrossCurve for aggregated TON‑Ethereum liquidity.

Risks

Young protocol with limited track record.
Potential token inflation.
Regulatory uncertainty.

Crouton Finance#

Crouton Finance is another TON DEX that adopts Curve’s StableSwap mathematics. It is backed by the TON Foundation, TON Ventures, and Curve’s algorithmic model. The platform also offers a one‑click investment account for Telegram users.

Advantages

Simple UI for staking and trading.
StableSwap algorithm minimizes slippage.
Strong backing from TON ecosystem partners.

Risks

Limited innovation beyond existing solutions.
Low initial liquidity, which can amplify price impact on large trades.

Benefits of StableSwap for DeFi#

Minimal slippage for stablecoin pairs, enabling large trades with little price impact.
High capital efficiency through concentrated liquidity around the 1:1 price range.
Lower impermanent loss due to the tight correlation of pooled assets.
Reduced fees because the algorithm requires less gas for swaps.
Cross‑chain compatibility, facilitating liquidity aggregation across multiple networks.

Current Landscape on TON#

Fully featured Curve‑style AMMs are not yet deployed on TON. Existing projects include:

STON.fi – the primary AMM on TON, using a hybrid model that approximates StableSwap for stablecoin pairs.
EVAA Protocol – a lending platform that works with stablecoins but does not yet offer dedicated StableSwap pools.

Torch Finance and Crouton Finance aim to fill this gap by implementing pure StableSwap mechanics as part of the Curve‑TON partnership.

Security Considerations#

Curve experienced a 2023 exploit via a Vyper compiler bug, resulting in a loss of over $52 million.
Large $CRV holders exert significant influence over Curve governance, raising centralization concerns.
Young TON implementations inherit similar smart‑contract risks and may face rug‑pull scenarios if liquidity is withdrawn abruptly.