crvUSD is Curve's native stablecoin using the novel LLAMMA (Liquidity Locking Automatic Market Maker) mechanism for soft liquidations. Instead of triggering a single catastrophic liquidation, LLAMMA gradually converts collateral over a price range.
What LLAMMA does
Traditional CDP stablecoins liquidate positions in a single event when collateral value drops below threshold. LLAMMA "soft-liquidates" — as price approaches liquidation, collateral gradually converts to stable, spreading the impact across a range.
This dramatically reduces liquidation cascades during volatile markets. Users pay a small "soft-liquidation loss" but avoid catastrophic single-event liquidations.
crvUSD Savings Rate
Similar to Sky's DSR — deposit crvUSD to earn yield paid from Curve protocol revenue.
Verdict
crvUSD's LLAMMA is a genuine innovation in CDP stablecoin design. Circulation stays small (~$300M) but the design is influential and worth understanding.