According to Michael Egorov, the founder of Curve Finance, the upcoming crvUSD stablecoin will be a very interesting development in the world of crypto.
The crvUSD is set to be issued by Curve in September, and will act as an interface to the yet-undeployed crvUSD smart contracts.
While details on the usage of crvUSD are sparse at this time, it’s clear that Curve plans to use the stablecoin as part of its DeFi platform.
This could have a significant impact on the overall crypto ecosystem, as it would mark one of the first times that a major DEX has issued its own stablecoin.
Prominent stablecoin swap application Curve Finance is nearing the launch of its native stablecoin, dubbed crvUSD, as per the initial code released by its developers on Tuesday.
The code library will act as an interface to the yet-undeployed crvUSD smart contracts and mark the first step toward the eventual issuance of the much-anticipated tokens.
Details on the usage of crvUSD were scarce at writing time, and Curve developers declined to share more information about the tokens with CoinDesk.
Curve uses smart contracts to offer an efficient way to exchange stablecoins while maintaining low fees and low slippage, according to developer documents. Depositors on Curve earn annual yields of up to 4% from one of the many pools on the platform, which locks over $5 billion worth of Ethereum-based tokens on its platform.
Curve tokens (CRV) are issued as yield farming rewards to liquidity providers on Curve Finance, and can be converted into vote-escrowed CRV (veCRV). Holding veCRV allows users to participate in platform governance, earn higher rewards and fees and receive airdrops.
Curve’s plans to deploy a dollar-pegged asset first became public in June. The stablecoin was confirmed by founder Michael Egorov last month, who said it was “possible” that crvUSD would be issued in September.
Meanwhile, some market observers have weighed in on the impact of crvUSD in the broader crypto ecosystem once it is issued.
“The crvUSD could be a very interesting development, as we haven’t yet seen a stablecoin that a major DEX issues,” (decentralized exchange) Daniel Zlotin, senior DeFi developer at Orbs, wrote in a Telegram message.
“Connecting a stablecoin with a viable DeFi platform could open up some interesting possibilities in terms of new models (such as using LP tokens as part of the backing system),” Zlotin added, cautioning that there would “definitely be some challenges” in implementing such a concept.
Others said Curve’s native stablecoin would help make the platform more liquid, ensuring long-term sustainability.
“The approach that Curve chose will potentially make the liquidity more sustainable,” shared Alex Pipushev, founder of GTON Capital, in a Telegram message. “That’s a good experiment to pursue more reliable stablecoin models.”
Stablecoins are a significant part of the overall crypto market with over $153 billion worth of such tokens currently in circulation.
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