Curve Finance, a decentralized finance (DeFi) protocol premiering its much-awaited stablecoin on the blockchain Ethereum network, recently completed the third deployment of crvUSD. The deployment was successful with no errors but provided a fix for the issue of high gas usage in particular cases - reducing it from 3 million gas to just 300,000 gas. The early detection of this issue was due to the involvement of the community in testing out various protocols and ensuring a smoother transition.

A stablecoin, is a digital asset pegged to an asset outside the blockchain, most commonly a fiat currency like the US Dollar or a precious metal, like gold. Its main function, and most attractive feature, is that they remain stable in terms of value.

Curve Finance’s stablecoin implementation, crvUSD, offers a unique twist on the traditional stablecoin model. A new loan liquidity algorithm dubbed LLAMA rebalances users’ collateral as the prices of digital assets fluctuate on the market. This ensures a more gentle liquidation process, characterized by unaltered flow of transition compared to the single crash event that happens in its rivals’ protocols.

Collateral stored in an automated market maker (AMM) pool guarantees liquidity for users to make trades and store their funds as opposed to them sitting in a vault or a lending pool. The overall system efficiency is what has made crvUSD attractive for potential users.

However, crvUSD will face an uphill struggle since other DeFi platforms too, are developing their own stablecoins. Scaling through market instability and userbase attraction is the primary challenge for Curve Finance and the crvUSD stablecoin.



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