Curve Finance, a decentralized exchange (DEX) platform, recently launched its upcoming stablecoin (cryptocurrency pegged to the value of a fiat currency: USD, Euro, etc) crvUSD on the Ethereum blockchain. It is designed to provide DeFi users with stablecoin yield opportunities and token swaps, which is currently having a total value lock of around $4.97 billion and is standing in competition with MakerDAO’s DAI and Aave’s GHO, both making use of a similar concept - collateralized stablecoins.

crvUSD is equipped with a novel lending-liquidating automated market maker (LLAMMA) algorithm which is aimed at lessening the effects of liquidations for all its borrowers. When the ETH backing up crvUSD reaches its liquidation price, the protocol is activated to convert the ETH to stablecoins, and when prices rise again, the ETH is converted back. This way, the liquidation process is smooth and not abrupt.

The launch of crvUSD on the platform boosted the values of Curve’s native token CRV to almost a dollar, and while it has gone down again since, it is still 2.25% down on the day and 94% from its peak value of $15.92 that it had reached in August 2020.

On May 5, Curve Finance revealed there were no errors with the stablecoin’s third deployment, but there was an issue of higher-than-expected gas usage in certain cases, which needed to be fixed. Currently, it is recorded that $1.83 million in collateral is already locked in crvUSD and is trading below its one-dollar peg at $0.927.

The launch of the crvUSD has introduced a new and innovative platform into the cryptocurrency market, providing users with a unique access to liquidity with its user-friendly insurance product while still giving them an opportunity to earn yields on their deposits. Its usage of the LLAMMA algorithm is a great way to bring an even level of convenience and decentralization of resources to the market, given the uncertainty brought by the collapse of several high-profile centralized exchanges and companies during the last year.



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