Curve DAO’s native stablecoin gains traction, leading to a 17% climb.

Until now, Curve DAO has experienced significant growth at the beginning of the month as CRVUSD, Curve’s own stablecoin, gains traction among users.

According to recent data shared on Curve DAO’s official Twitter page, the stablecoin has reached a supply and debt level of over $50 million, indicating heavy usage just two months after its launch.

CRVUSD now joins the increasing number of stablecoins available in the industry. However, there was a tense moment in the crypto market last month.

Some graphs pic.twitter.com/lHnNw6Cej1

— Curve Finance (@CurveFinance) July 1, 2023

Major Hiccup In The Stablecoin Industry

Last month, Tether’s USDT depegged, causing serious concerns about another potential collapse. According to some sources, this was mainly due to an imbalance within Curve DAO’s Curve 3Pool. This small imbalance led to a 70% surge in USDT’s balance, indicating a significant sell-off.

In an interview with Tether CTO Paolo Ardoino, he highlighted Tether’s role as “a gateway to liquidity” and expressed confidence in USDT, stating that “these events are a good test for us.”

Meanwhile, there is virtually no fear, uncertainty, or doubt surrounding CRVUSD, thanks to the ecosystem’s innovative utilization of LLAMMA—an exclusive algorithm designed specifically for CRVUSD.

CRV market cap currently at $694 million. Chart: TradingView.com

LLAMMA: How Does It Work?

In a Twitter thread created by Poopman DeFi, LLAMMA uses a concept known as soft liquidation. The user must first deposit sfrxETH as collateral to borrow CRVUSD at an overcollatelrized ratio of 117%. LLAMMA then uses the price fluctuations of the two assets to rebalance the ratio between them.

crvUSD is the most hard-core stablecoin to ever exist.

Instead of facing full liquidation when borrowing CDPs,

crvUSD introduced LLAMMA ????, an algo that uses soft liquidation to reduce impermanent loss during huge liquidation.

A very in-depth thread on crvUSD by @CurveFinance ???? pic.twitter.com/lnY5TJKV6V

— Poopman ????, ????- DeFi Rookie (@poopmandefi) July 2, 2023

The collateral is then spread over a band, which is essentially a price range in which the collateral will be distributed. This reduces CRVUSD’s exposure to Ethereum while benefiting from any increase in ETH’s price.

According to recent sources, Frax Finance’s sfrxETH is currently the only supported collateral by the system, with more assets to be added in the future.

CRV sustains a 17.3% increase in the last week. Source: Coingecko

Bulls Lead The Way, But Can They Sustain The Momentum?

At the time of writing, the CRV price was at $0.799, up almost 5% in the last 24 hours. The token has shown an impressive 17.3% rally in the past seven days, according to data from crypto market tracker Coingecko.

CRV is currently facing resistance at the $0.817 price level. With its current momentum, we may see a bullish breakthrough next week or even sooner.

This could provide the bulls with an advantage for another price increase in the near future. However, if it fails to break through this level, CRV will need to stabilize above or below $0.712.

(The content on this site should not be considered investment advice. Investing involves risk, and your capital is at risk when you invest).

Featured image from PortalCripto

We will continue to update Phone&Auto; if you have any questions or suggestions, please contact us!

Share:

Was this article helpful?

93 out of 132 found this helpful

Discover more

DeFi

Curve's value increases by 22% as the founder sells CRV tokens to repay an Aave loan.

Curve experiences significant growth, with a 22% increase, thanks to the founder's successful sale of CRV to influent...

DeFi

Crypto exchange HTX gets raided for $258M, investors sprint for the exits

Fashionista readers, take note Popular cryptocurrency exchange, HTX, has experienced a significant $258 million decre...

DeFi

Decentralized Finance and the Rise of Liquid Restaking Tokens (LRTs) on Ethereum

The emergence of popular liquid restaking platforms such as Puffer and Ether.Fi has generated billions of dollars in ...

News

Justin Sun considers acquiring FTX's cryptocurrency holdings.

Justin Sun, the visionary Founder of Tron and esteemed Advisor to Huobi Global, has enthusiastically conveyed his str...

DeFi

🚀 Liquid Restaking Tokens: The Hype, The Risks, and The Future of Ethereum DeFi! 🌟

Discover the latest developments in the world of blockchain technology with our weekly newsletter. This week, join Sa...

BlockChain

Swell Introduces Layer-2 Restaking Rollup in Partnership with AltLayer and EigenLayer

Swell teamed up with Ethereum scaler AltLayer and a16z-backed crypto-staking project EigenLayer to create the rollup,...