Leading 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 assets without permission, although the specific parameters for collateralization and soft liquidation losses will vary based on algorithms.
Curve Finance had previously announced on January 24 that it would be launching a lending market. After nearly three weeks, on February 12, Curve Finance tweeted that the lending market, Curve Lend (formerly known as LlamaLend), is now live and in the testing phase.
According to the website interface, the default homepage of Curve Lend is the borrowing market. The initial markets include CRV, tBTC, and wstETH. Users can provide CRV, tBTC, and wstETH as collateral to borrow stablecoin crvUSD.
Previously, Curve founder Michael Egorov had collateralized 300,000 CRV worth $174,000 to borrow 93,000 crvUSD. He had also issued a challenge, 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 lend using stablecoin crvUSD and a permissionless market created by tokenized collateral. This means that Curve Lend users can list any assets without permission.
Curve states that the lending positions are passively managed. If the price of collateral falls, the system will automatically sell the collateral in “soft liquidation mode.” If the price of collateral rises, the system will restore the collateral. This means that there may be some losses during the liquidation and deliquidation process.
When using Curve Lend, users should be aware of the following risks:
– If the collateral enters soft liquidation mode, users will be unable to withdraw the collateral or add more collateral to the position.
– A significant price drop in the collateral within a short period may result in substantial losses and reduce the health of the user’s loan.
– If a user is in soft liquidation mode and the price of the collateral sharply rises, there may be losses during the rise. If the user’s loan health is poor and the collateral price rises, it may reduce the health of the user’s underwater loan.
– If a user’s loan status reaches zero or lower, the position will be forcefully liquidated, and the liquidation cannot be canceled. Therefore, users should make wise decisions regarding their leverage position.
Curve emphasizes that both crvUSD stablecoin and Curve Lend are currently in the testing phase, and therefore, using crvUSD, Curve Lend, or any cryptocurrencies carries high risks. Due to their experimental nature, users may experience partial or total loss of investment.
Additionally, 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 normal operation of crvUSD and Curve Lend, relevant parameters may be adjusted after approval and updates by Curve DAO. Users must stay informed about any parameter changes in the stablecoin infrastructure.
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