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DeFi Platform Curve Finance Nears Issuance of Native Stablecoin crvUSD

UTC by Tolu Ajiboye · 3 min read
DeFi Platform Curve Finance Nears Issuance of Native Stablecoin crvUSD
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Although developers remain tight-lipped on details, Curve is almost close to launching its stablecoin crvUSD.

Ethereum-based, stablecoin-swapping application Curve Finance is reportedly close to launching its native stablecoin. Dubbed crvUSD, details of this digital currency are scarce as of press time. However, the code library will function as an interface to the upcoming crvUSD smart contracts. This will also set the ball rolling for the eventual issuance of the tokens. Speaking on the Curve stablecoin initiative, Daniel Zlotin, senior DeFi developer at Orbs, stated in a Telegram message:

“The crvUSD could be a very interesting development, as we haven’t yet seen a stablecoin that is issued by a major decentralized exchange.”

Furthermore, Zlotin added:

“Connecting a stablecoin with a viable DeFi platform could open up some interesting possibilities in terms of new models (such as using LP tokens as part of the backing system).”

However, the Orbs senior developer also admitted that there would be implementation challenges. Yet still, some opine that crvUSD will ensure the platform’s long-term sustainability by making it more liquid. For example, according to GTON Capital founder Alex Pipushev, in a Telegram message:

“The approach that Curve chose will potentially make the liquidity more sustainable. That’s a good experiment in pursuit of more reliable stablecoin models.”

What We Know So Far on Curve Stablecoin Agenda

Although Curve developers did not provide a lot of information, a few things are already known. For instance, the Curve platform uses smart contracts to provide an efficient avenue for swapping stablecoins. The Ethereum-built decentralized exchange (DEX) achieves this while keeping fees and slippage on the low end. According to developer documents, Curve uses an Automated Market Maker (AMM) to swap with low slippage instead of using an Order Book. On its part, AMM benefits users when the price for exchanging stablecoins, including USDTUSDC, and DAI, remains in a relatively stable range.

Curve depositors rake in yields as high as 4% annually from one of the several pools on the platform. Furthermore, this platform custodies more than $5 billion worth of Ethereum-based tokens.

Besides stablecoin-swapping in Liquidity Pools, Curve also facilitates swapping some tokenized coins. Supported assets include WBTC, reBTC, and pBTC.

Curve’s native tokens (CRV) see issuance as yield farming rewards to liquidity providers on the prominent stablecoin swap application. It is also possible to convert these CRV tokens into vote-escrowed CRV versions called veCRV. Holders of these veCRVs can participate in platform governance, which also makes them privy to other perks. These include earning higher rewards and fees as well as receiving airdrops.

Curve first publicly revealed plans to deploy a dollar-pegged stablecoin back in June. This agenda was also later confirmed by the platform’s founder Michael Egorov last month. At the time, Egorov stated that it was likely that the fiat-pegged digital asset would see issuance in September.

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Tolu Ajiboye
Author Tolu Ajiboye

Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge. When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.

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