The developers of decentralized exchange Curve Finance have released code and official documents for Curve's soon-to-be launched decentralized stablecoin called crvUSD.
While an official announcement from Curve is still pending, the repository published on the projects’ official GitHub account shows the project is all set to finish work on its crypto-backed stablecoin that's soft-pegged to the US dollar.
Per the whitepaper, authored by Curve Finance founder Michael Egorov, crvUSD will have similar functionality to MakerDAO’s stablecoin called DAI. Matching DAI, it will be overcollateralized with crypto assets.
The whitepaper states that users will be able to mint the stablecoin by depositing excess collateral in the form of a cryptocurrency loan in a reserve, a mechanism called a collateralized debt position (CDP).
The stablecoin will also rely on a novel algorithm dubbed Lending-Liquidating AMM (LLAMMA), which will work to continuously liquidate and sell the deposited collateral to better manage potential collateralization risks.
Egorov first hinted the project was working on a stablecoin in July. The stablecoin will complement Curve DAO tokens (CRV), the native token of Curve, which are issued as rewards to liquidity providers on Curve Finance. CRV tokens can be locked to participate in governance and receive protocol revenue. Crypto-backed stablecoins account for more than $7 billion in total market capitalization, according to data aggregated by The Block.
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