Curve Finance Launches crvUSD Stablecoin On Ethereum
- Circle Finance deploys crvUSD stablecoin on Ethereum mainnet.
- Circle Finance created 20 million crvUSD on the mainnet.
- crvUSD is a decentralized currency pegged to the U.S. dollar and uses a new algorithm called Lending-Liquidating AMM (LLAMMA).
Curve Finance recently deployed smart contracts for its decentralized stablecoin, crvUSD, marking its release on the Ethereum mainnet.
However, the launch is not yet finalized as a user interface for interacting with the crvUSD smart contracts is still under development.
Curve Finance announced the deployment of the crvUSD smart contracts through a tweet: “As many have figured out, deployment of crvUSD smart contracts has occurred. This is not finalized yet because the UI also needs to be deployed. Stay tuned.” Currently, the team has created a total of 20 million crvUSD on the mainnet, which can be viewed on the Etherscan blockchain explorer.
However, the Curve Finance stablecoin, a decentralized currency pegged to the U.S. dollar, employs a token design similar to MakerDAO’s DAI stablecoin. Unlike traditional stablecoins which rely on dollar reserves, the Curve Finance stablecoin will be over-collateralized by supported crypto assets surpassing the value of issued crvUSD. Similar to DAI, crypto users on the Curve platform can mint crvUSD stablecoins through overcollateralized loans.
The stablecoin will rely on a new algorithm called Lending-Liquidating AMM (LLAMMA), which continuously liquidates and automatically deposits collateral to manage the risk associated with the stablecoin, while maintaining its peg to the U.S. dollar. Designed by one of the largest decentralized finance platforms with a strong focus on stablecoin, Curve Finance stands a chance at gaining adoption.
Nevertheless, the stablecoin faces stiff competition in a market currently dominated by centralized stablecoins such as USDT and USDC, which represent $82 billion and $30 billion respectively of the overall $130 billion stablecoin market. In comparison, DAI has a market capitalization of $4.6 billion.
Aave, the largest lending protocol, is testing a new stablecoin called GHO, which was deployed on Ethereum’s Goerli testnet in February and remains in development. This could pose a threat to crvUSD’s adoption and market share. Despite this, crvUSD’s new algorithm and token design set it apart from other stablecoins and it will be interesting to see how it fares in the competitive stablecoin market.
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