.CurveFinance continues to ship new pools and features to Curve. 💪 In mid 2022, they hinted at a launch of their own decentralized stablecoin and in November the same year, they released the crvUSD whitepaper. More about Curve 👇
fees. In the event that the collateral price bounces back and the user does not actively repurchase their collateral assets, the liquidation locks in the losses for the user’s collateral and causes them to miss out on the subsequent upside.
That said, DeFi heavyweights have pointed out that LLAMMA could potentially lock in losses for the user in the event of a large price swing. Curve has put their LLAMMA to the test on this front, showing that with a price swing of 10% below the liquidation threshold over a period of 3 days, only 1% of collateral was lost.With this model of crvUSD, crvUSD could attract more liquidity providers to provide liquidity in Curve’s LPs to achieve greater capital efficiency with their funds.
On the other hand, LLAMA’s constant rebalancing of users’ collateral will generate more trading volume in Curve’s pools, which produces more fees for the protocol and veCRV token holders. Moreover, crvUSD loans will likely also incur borrowing fees, which creates a whole new revenue stream for the protocol and their veCRV token holders.
With these two tailwinds in mind, crvUSD could restart Curve’s positive flywheel and reintroduce new capital to the protocol.Curve Finance has come a long way since its early days in the beginnings of DeFi Summer in 2020. But even with their dominance, the road ahead is not easy as competitors rise up to challenge their place in the DeFi space. Other dominant players in the space like
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