CurveDao – the decentralized finance (DeFi) protocol, has launched an algorithmic stablecoin crvUSD successfully. The launch took place on the Ethereum network.
Decentralized finance protocol, Curve Finance, launched on Ethereum, its native algorithmic stablecoin. crvUSD is pegged to the value of the United States dollar. The minting of crvUSD has so far produced a value of over $22 million.
According to data on Etherscan – a blockchain explorer, up until today, May 4, in the past eight hours, the contract has minted $22 million worth of crvUSD, from which $20 million of them were minted within the first five minutes of its launch.
The deployment of crvUSD on the Ethereum network is a key step toward the algorithmic stablecoin’s public release. In particular, the stablecoin is still unavailable to general users, while Curve’s front-end user interface is pending integration on its official website.
Who Said What?
In response to a question in the official Curve Finance Telegram channel regarding when users expect the stablecoin to be available for the public, an admin stated that it would be coming soon.
As many figured – deployment of crvUSD smart contracts has happened!
This is not finalized yet because UI also needs to be deployed. Stay tuned!
— Curve Finance (@CurveFinance) May 3, 2023
According to data from DeFiLlama, at the time of the launch, Curve Finance was one of the most prominent DeFi protocols in this industry, with a total value locked (TVL) of around $4.4 billion.
Following the collapse of the Terra ecosystem in May 2022, algorithmic stablecoins became the focus of industry wide criticism. This collapse occurred when the TerraUSD (UST) stablecoin lost its pegg. Moreover the value of its sister currency Terra (later renamed Terra Classic – LUNC) dropped by more than 99%. A complex arbitrage process maintained UST’s value, which a group of sophisticated traders eventually undermined.
Curve’s crvUSD differentiates from the now-defunct UST by using a similar design to MakerDAO MKR $695 DAI $1.00 stablecoin. According to the crvUSD whitepaper, it will function as a “collateralized-debt-position” stablecoin. It means users need to deposit collateral before taking out a loan in crvUSD. Curve Finance has not yet determined the preferred asset to be used as collateral.
Curve is not the only DeFi protocol trying to bring an algorithmic stablecoin to the market. Aave (AAVE) – a competitor protocol, issued a testnet version of its “native decentralized, collateral-backed stablecoin,” named GHO, in February of 2023.
Curve Team member was the announcer of their plan to issuing an algorithmic stablecoin. The user @mrblocktw announced the information on July 21, 2022 via a tweet.
you know you know
— 區塊先生 ⚠️ (rock #58) (@mrblocktw) July 21, 2022
Later the same day, Curve’s founder Michael Egrov, confirmed that the stablecoin would be overcollateralized at ReDeFine the following day at the Web3.
KK: Curve is launching a stablecoin?
ME: Over-collat. That's all I can say for now.
KK: veToken success?
ME: veToken aligns long-term incentive of governance and users. This was inspired by some disasters observed from historical mistakes of American corporates.
— SCB 10X (@SCB10X_OFFICIAL) July 21, 2022
According to TradingView data, the protocol’s native Curve DAO (CRV) token increased by almost 7% after the launch of the new stablecoin. CRV is now trading for $0.96.