Curve DAO’s native stablecoin, CRVUSD, has experienced significant growth and traction in just two months since its launch. Recent data posted by Curve DAO’s official Twitter page reveals that the stablecoin has reached a supply and debt level of over $50 million. This indicates that CRVUSD is being heavily utilized by users, adding to the growing number of stablecoins available in the industry.
However, the stablecoin industry recently faced a major hiccup when Tether’s USDT depegged last month. This event sparked fears of another collapse in the market. Some sources attribute the depegging to an imbalance within Curve DAO’s Curve 3Pool, which caused a 70% surge in USDT’s balance and indicated a significant sell-off.
Despite this incident, there is no fear, uncertainty, or doubt surrounding CRVUSD, thanks to the implementation of LLAMMA. LLAMMA is an exclusive algorithm designed specifically for CRVUSD and is based on the concept of soft liquidation. Users must deposit sfrxETH as collateral to borrow CRVUSD at an overcollatelrized ratio of 117%. LLAMMA then utilizes the price fluctuations of the two assets to rebalance the ratio.
The collateral deposited by users is spread over a band, which reduces CRVUSD’s exposure to Ethereum while allowing gains if ETH’s price increases. Currently, Frax Finance’s sfrxETH is the only supported collateral by the system, but more assets are expected to be onboarded in the future.
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In terms of market performance, CRV has shown promising results. At the time of writing, CRV’s price was at $0.799, reflecting a nearly 5% increase in the last 24 hours. Over the past week, the token has seen a remarkable 17.3% rally. These figures indicate bullish momentum and the potential for a breakthrough in the near future.
However, resistance at the $0.817 price level poses a challenge for CRV. If the token can break through this resistance, it may fuel another price pump. On the other hand, failing to surpass this level would require CRV to stabilize above or below $0.712.
It’s important to note that the content of this piece should not be regarded as investment advice. Investing always carries risks, and capital is subject to these risks.
In conclusion, Curve DAO’s CRVUSD stablecoin has gained significant traction since its launch, reaching a supply and debt level of over $50 million. Despite recent uncertainty in the stablecoin industry, CRVUSD remains strong due to its innovative utilization of the LLAMMA algorithm. Market performance has been positive, with the token experiencing notable gains. The future looks promising for CRV, but challenges lie ahead as resistance levels must be overcome to sustain bullish momentum.
