The code of crvUSD, the future algorithmic stablecoin of the decentralized finance (DeFi) protocol Curve, has just been published on the GitHub platform. According to the whitepaper written by the founder of Curve himself, the stablecoin will be over-collateralized by different cryptocurrencies and can be minted by users when they deposit liquidity.
Curve publishes the code of its stablecoin
Timidly announced last July by the founder of Curve Michael Egorovthe algorithmic stablecoin of the popular decentralized finance (DeFi) protocol saw his code as well as his white paper publicly published on the GitHub platform.
As we reported last August, “crvUSD” will effectively be a decentralized stablecoin over-collateralized by different cryptocurrencies in a manner similar to Maker’s DAI.
According to the whitepaper written by Michael Egorov himself, users will be able to mint the crvUSD by participating in the over-collateralization of the latter by depositing cryptocurrencies on Curve, all structured by a unique mechanism called Lending-Liquidating AMM Algorithm, or more simply LLAMA.
Schematization of the structure of the crvUSD
In his conclusion, the founder of Curve explains that these different mechanisms could solve the various problems inherent in algorithmic stablecoins :
“The mechanisms presented can hopefully resolve the risk of liquidations for making and borrowing stablecoins. In addition, stabilization and automatic monetary policy mechanisms can help maintain the peg without the need to maintain an SMP. [Peg Stability Module, NDLR] excessive. »
Indeed, unlike stablecoins like USDC or USDT which are over-collateralized with “real” money, algorithmic stablecoins are backed by different cryptocurrencies. Often, in order to cope with market volatility, algorithmic stablecoins are over-collateralized to some degree with USDC or USDT.
Although the crvUSD code has been publicly revealed, no date has been issued for the official release of the stablecoin.
The crvUSD will thus join the CRV token of Curve, which is distributed as a reward on the decentralized finance platform for users depositing cash there. Also in the interest of decentralization, the CRV token also acts as Curve’s governance token.
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