Curve Finance’s newly launched algorithmic stablecoin, crvUSD, saw a 0.25% price increase in the last 24 hours, with the DeFi protocol minting more than $22 million worth of the dollar-pegged token.
Data from blockchain explorer Etherscan shows that a contract deployed by Curve Finance on the Ethereum mainnet produced more than $22 million worth of crvUSD in the last few hours, with $20 million of that amount minted in just 5 minutes.
Following issuing the first tokens, a wallet labeled “Curve.Fi Team” by blockchain data analysis firm Arkham Intelligence leveraged about $1.8 million in frxETH, issued by Frax Finance, to create a $1 million crvUSD loan, which Curve later confirmed.
Curve has cautioned that there is still some work to be done before crvUSD deployment can be finalized, especially regarding its integration into the DeFi’s user interface.
According to an admin on Curve Finance’s official Telegram channel, crvUSD is still “waiting on the front end” before it can be fully released.
However, minting $22 million worth of the algorithmic stablecoin is a significant step towards bringing it to the public.
Once fully deployed, Curve’s stablecoin will face stiff competition as a spate of other DeFi protocols have also issued their own native stablecoins to rope in more users and boost declining crypto trading and lending activity.
Curve stablecoin gains 7%
After the $22 million crvUSD mint, the stablecoin’s price reportedly increased by 7.16%.
While initially trading at about $0.96, data from CoinGecko shows that crvUSD’s price shot up to $1.03 as the market reacted to the minting. However, a couple of hours later, it dropped to $1.01 before pushing back up to $1.02, where it hovered chiefly until going to press.
While there are some jitters regarding algorithmic stablecoins since the collapse of Do Kwon’s Terra USD (UST), Curve Finance maintains that its new offering is distinct from UST in that it employs a design similar to MakerDAO’s DAI stablecoin.
Curve claims that crvUSD will function as a “collateralized-debt-position” stablecoin, meaning that users must deposit collateral to take out a loan in crvUSD.
However, the DeFi protocol, whose total value locked (TVL) is currently pegged at about $4.4 billion by DeFiLlama, has yet to identify the preferred asset users can leverage as collateral.