Lending protocol Curve Finance has launched a decentralized yield-bearing stablecoin, dubbed "Savings-crvUSD" (scrvUSD) to offer "low-risk" returns for investors and help scale the underlying crvUSD stablecoin.
According to the November 13 announcement, Curve Finance, users can mint scrvUSD by depositing crvUSD to the scrvUSD module. The underlying crvUSD is overcollateralized by several digital assets including Ether (ETH), Wrapped Bitcoin (WBTC), and others. In a statement to Cointelegraph, Spokespeople for Curve Finance explained that user funds in scrvUSD are never rehypothecated or moved from the vaults where they sit.
This allows the vault to stabilize borrowing rates for the underlying crvUSD stablecoin. “With [over] 3 million crvUSD inside Savings crvUSD, this new part of the system is already sustainable,” Curve Founder Michael Egorov told Cointelegraph.
Curve Finance asserts that the introduction of scrvUSD will enhance the composability of the lending protocol's stable assets — which can be used across the decentralized finance ecosystem to create novel opportunities for traders and investors.
A graphic depicting crvUSD and scrvUSD’s influence on Curve Finance borrowing rates. Source: Curve Finance
Related: Centralized stablecoins may pose risk to DeFi — Curve Finance founder
Curve Finance increases DeFi composability
In June 2024, Curve Finance pivoted from using the 3cr token for fee distribution to using its native crvUSD stablecoin. At the time, Curve Finance founder Michael Egorov told Cointelegraph that the shift to crvUSD would incentivize users to deploy the stablecoin across different decentralized finance services and products.
Following the adoption of crvUSD as the defacto fee distribution asset for Curve Finance, the DeFi platform announced a significant reduction of annual token emissions for its Curve DAO Token (CRV) — the governance token for the Curve decentralized autonomous organization. In 2020, approximately 274 million CRV tokens were issued, compared to only 137 million in 2024.
More recently, in November 2024, Curve Finance began collaborating with The Open Network to increase composability between the two decentralized ecosystems, allowing the diverse pieces of DeFi infrastructure to interact more seamlessly.
As part of the collaboration between the two ecosystems, a competition was started to develop Curve’s Constant Functional Market Maker (CFMM) — which aims to increase efficiency by curbing volatility and market slippage.
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