Renowned decentralized exchange Curve Finance announced today that its permissionless lending market, Curve Lend, has officially launched. Currently in the testing phase, users of this market can list any asset without permission, although the specific collateral ratio parameters and soft liquidation losses for each asset will vary based on algorithms.
Curve Finance had previously announced the launch of its lending market on January 24 and revealed that the lending contracts had been deployed. After nearly three weeks, Curve Finance tweeted on February 12 that the lending market, Curve Lend (LlamaLend), is now live and currently in the testing phase.
According to the website interface, the default homepage is the borrowing market, which initially includes CRV, tBTC, and wstETH. Users can provide CRV, tBTC, and wstETH as collateral to borrow the stablecoin crvUSD.
Prior to this, Curve founder Michael Egorov had used 300,000 CRV tokens worth $174,000 as collateral to borrow 93,000 crvUSD. He had challenged others by saying, “Want to liquidate me? Come on! You can liquidate or cancel my loan position at any time. Please integrate your arbitrage or liquidation bots, or if you can, take my loan position as a bonus!”
Curve Lend operates by allowing users to borrow using the stablecoin crvUSD and a permissionless market created by tokenized collateral. This means that Curve Lend users can list any asset without permission.
Curve points out that the lending positions are passively managed. If the collateral price drops, the system will automatically sell the collateral in “soft liquidation mode.” If the collateral price rises, the system will restore the collateral. This means that there may be some losses during the liquidation and de-liquidation processes.
When using Curve Lend, users should be aware of the following risks:
– If the collateral enters soft liquidation mode, users will not be able to withdraw the collateral or add more collateral to the position.
– A significant drop in collateral price within a short period may result in substantial losses and reduce the health of user loans.
– If a user is in soft liquidation mode and the collateral price sharply rises, de-liquidation losses may occur during the rise. If the user’s loan health is poor and the collateral price rises, it may reduce the health of underwater loans.
– If a user’s loan condition reaches zero or lower, the position will be forcibly liquidated and cannot be canceled. Therefore, users should make wise decisions regarding their leverage position.
Curve reminds users that both crvUSD stablecoin and Curve Lend are currently in the testing phase, and therefore, there is a high risk of partial or total loss when using crvUSD, Curve Lend, or any cryptocurrency due to their experimental nature.
Furthermore, due to the volatility of the stablecoin market or rapid changes in stablecoin liquidity, the value of crvUSD may fluctuate.
Curve states that both Curve Lend and crvUSD are issued or managed through smart contracts without intermediaries. However, to ensure the proper functioning of crvUSD and Curve Lend, the relevant parameters may be adjusted after approval and updates by Curve DAO. Users should stay informed about any parameter changes in the stablecoin infrastructure.
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