AMM Curve Finance protocol’s CRV token price jumped on Feb. 14, hinting at the upcoming stablecoin crvUSD.
On the morning of February 14, Curve Finance’s Twitter page posted a proposal to update the protocol, which would support stablecoin pools with built-in price reference oracle, support interaction with other DeFi projects.
Things would have been normal if Curve hadn’t “implied” that this update was necessary for crvUSD to operate automatically. Many investors see this as a signal that Curve’s stablecoin is in the final stages of development and is about to be released.
Needless to say – this is required for crvUSD to function autonomously https://t.co/GFA5aXAjv0
— Curve Finance (@CurveFinance) February 13, 2023
crvUSD is the name of the native stablecoin developed by Curve, which has been revealed by this AMM protocol since mid-2022 but the launch date is unknown. Even so, Curve has released the full source code and related technical documents of the stablecoin.
Accordingly, crvUSD is a stablecoin operating under the over-collateralized stablecoin model, ie the collateral must be higher than the issued stablecoin pahst. Users need to deposit crvUSD into the Curve protocol to be able to issue crvUSD, similar to MakerDAO’s famous ETH-DAI model.
However, the difference of crvUSD compared to other algorithmic stablecoin solutions is the application of an anti-bad debt mechanism called LLAMMA.
CRV price is increasing by more than 12% thanks to benefiting from the above information, as well as the fact that AMM recorded $ 1 billion in trading volume in the last 24 hours, as reported by Kyptos.
The cryptocurrency market in general is experiencing a lot of turmoil in the stablecoin segment when recently, the legal events surrounding Paxos and the stablecoin issued by this company, BUSD, made investors feel nervous and switch to alternative solutions.
In addition, the prolonged downtrend market also made many DeFi protocols look to stablecoins as new tools to attract liquidity from users, typically stablecoin GHO of decentralized lending protocol Aave.
Synthetic Kyptos
