Decentralized exchange Curve Finance has added support for a wrapped version of Lido’s stETH as collateral for issuing and borrowing the crvUSD stablecoin.
/1 Looks like we have the first looping happening with $crvUSD wrapped $stETH collateral.
This addy started off with 21.8 $wstETH as collateral, and grew the position to 761k crvUSD and 381 wstETH. https://t.co/yQxue26Rax pic.twitter.com/sGhwR7mJH6
— DefiMoon 🦇🔊 (@DefiMoon) June 8, 2023
The corresponding proposal was received during voting 100% support with a quorum of 84.5%.
WstETH wrapped staking ether is an asset from Lido for interacting with DeFi protocols. Blocked by users on the Ethereum (ETH) platform presents stETH.
However, the token has a dynamic balance due to the accrual of staking rewards. Some decentralized platforms like Uniswap, 1inch and Sushi Swap do not support this mechanism and users can lose some of their income by moving stETH to them. The problem is solved by using wstETH.
The Curve Finance team launched crvUSD on the Ethereum mainnet on May 4th. The process required a restart due to a detected error, which the developers successfully implemented.
The first collateral for issuing a stablecoin on the platform was sfrxETH from the Frax protocol. The asset is also used to generate income from ether staking.
At the time of writing, borrowings in crvUSD exceeded $14.5 million. Users borrowed $4.04 million against wstETH collateral. The annual rate for them is 6.04%, while for holders of sfrxETH it is 6.67%.
Data: Curve Finance.
The crvUSD issuance mechanism uses an over-collateral model similar to DAI from the MakerDAO project. The capitalization of this stablecoin is approaching $4.6 billion (DeFi Llama).
Recall, according to media reports, Curve Finance CEO Michael Egorov and his wife Anna purchased two villas worth about $40 million in Melbourne.
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