May 4, 2023 12:36 UTC
May 4, 2023 at 12:36 UTC
The algorithmic crvUSD stablecoin has been successfully deployed on the Ethereum network by the decentralized finance protocol CurveDAO.
Curve Finance, a decentralized finance (DeFi) platform, has released a native algorithmic US dollar-pegged stablecoin on the Ethereum mainnet and has generated over $22 million in crvUSD token sales.
The contract had generated over $22 million crvUSD in the previous eight hours, with $20 million of that amount generated in the first five minutes, according to data from blockchain explorer Etherscan at the time of writing on May 4.
An important step towards the public release of an algorithmic stablecoin has been taken with the adoption of crvUSD on the Ethereum network. Notably, until integration with Curve’s front-end user interface on the official website, the stablecoin remains inaccessible to the general public.
When asked when the stablecoin would be available to the general public on Curve Finance’s official Telegram group, one admin said that it would be “coming soon”.
According to information from DeFiLlama, Curve Finance is one of the largest DeFi protocols on the market at the time of publication, with a total locked value (TVL) of around $4.4 billion.
Following the collapse of the Terra ecosystem in May 2022, when the stablecoin TerraUSD (UST) lost its stake and the value of its sister token Terra—later renamed Terra Classic (LUNC)—dropped by more than 99%, the algorithmic stablecoin came under fire from across the industry. The complicated arbitrage mechanism that kept the UST high was finally broken by a team of experienced traders.
The now-defunct UST is different from Curve’s crvUSD, which used a similar design to the MakerDAO $700DAI ticker MKR down stablecoin’s $1 ticker. The crvUSD whitepaper states that crvUSD will operate as a “secured debt position” stablecoin, requiring users to deposit security before getting a loan on crvUSD. Curve Finance has not yet identified preferred assets to be used as collateral.
Not only Curve but other DeFi protocols aim to launch algorithmic stablecoins. Last February, rival protocol Aave (AAVE) provided a testnet version of a “decentralized, collateral-backed native stablecoin,” known as GHO.
A Curve Team member named mrblocktw first revealed Curve’s intention to launch an algorithmic stablecoin in a tweet on July 21, 2022.
At the ReDeFine Tomorrow Web3 Summit that day, Curve founder Michael Egorov confirmed that the stablecoin would be overcollateralized.
According to data from TradingView, the native Curve DAO token (CRV) of the protocol increased by nearly 7% following the introduction of the new stablecoin. The current exchange rate for the CRV is $0.96.