Curve Finance, a decentralized finance (DeFi) platform, has released its native algorithmic US dollar-pegged stablecoin on Ethereum mainnet and has already minted more than $22 million in crvUSD token sales.
The public release of Curve‘s long-awaited stablecoin has reached a significant turning point with the deployment. With almost $5 billion in assets on the network, one of the biggest decentralized stablecoin marketplaces, Curve, said last year that it had begun creating its own dollar-pegged stablecoin.
A multitude of DeFi protocols is currently creating or already have their own stablecoins in an effort to lure users and boost activity during a time of waning crypto trading and lending. This will present fierce competition for Curve’s stablecoin.
The crvUSD white paper describes a novel lending-liquidating automated market maker algorithm called LLAMMA, which is utilized for lending and liquidating. It also aims to mitigate the impact of liquidations on borrowers. Curve’s stablecoin will face fierce competition as numerous competing DeFi protocols are developing their own native stablecoins to draw users and boost activity at a time when Crypto trading and lending are flagging.
The stablecoin has a revolutionary lending-liquidating automated market maker mechanism dubbed LLAMMA, according to the crvUSD white paper. For borrowers, the system is intended to mitigate the effects of liquidations.
As the liquidation price approaches, the protocol begins converting the ETH backing crvUSD to stablecoins. It is immediately changed back into ETH when the exchange rates rise again. As a result, liquidations will occur gradually over time instead of abruptly all at once.
In addition, Curve is promoting the decentralization aspect in light of the failure of a number of well-known centralized exchanges and businesses last year.
$1.83 million in collateral had already been locked in crvUSD, according to DeFiLlama statistics.
