Curve Finance was the epicenter of the stablecoin wars in 2021. Now it’s getting ready to launch its own stablecoin even as the cryptocurrencies have come under intense scrutiny in the wake of Terra’s failure in May and a looming regulatory crackdown.
Code Now Public
Curve’s plans to deploy a dollar-pegged asset became public in June, but details were scarce. With the code now public, DeFi enthusiasts are working to ascertain what they can about crvUSD.
“If cvUSD is what I think it is, I am HYPE,” tweeted Scoopy Trooples, co-founder of the self-paying loan protocol Alchemix,
Scoopy told The Defiant he believes crvUSD will be borrowable against liquidity provider (LP) tokens for two of Curve’s largest pools, tricrypto and 3pool.
CryptoCondom, a well-known commentator on the Curve ecosystem, suggested on Twitter that crvUSD will be overcollateralized by tricrypto, which is a pool of ETH, WBTC, and USDT. Users can trade between those assets by using tricypto.
Curve’s push to introduce a new stablecoin is a bold move given the struggles faced by stablecoins this year. Circle’s USDC took heat for banning addresses in August in response to the U.S. Treasury Department’s sanctioning of Tornado Cash, the crypto mixer.
Not Before The Merge
And Janet Yellen, the department’s secretary, called on Congress to pass legislation to regulate stablecoins after Terra’s multi-billion dollar stablecoin collapsed in May.
Curve’s team doesn’t appear to be deterred by the threat of regulation. Yet Michael Egorov, Curve’s founder and CEO, does appear reluctant to launch crvUSD before Ethereum’s Merge, which is set to happen between Sep. 15 and 17. A screenshot from the Curve Market Cap newsletter showed Egorov saying that a crvUSD launch before The Merge would be “risky.”
Curve’s native token hasn’t reacted favorably to the news about crvUSD — CRV is down about 12% in the past 24 hours.
Curve is among DeFi’s largest protocols. The AMM has averaged roughly $100M in daily volume for the past month, according to The Defiant Terminal.