Stablecoins have been a major point of interest in the crypto market throughout 2022. They’re the safest asset to hold in terms of volatility, they have infinite utility, and they are the least likely to be rocked by regulatory upheaval. Within the realm of DeFi, they are an appealing tool for staking and earning passive income. So, there’s no wonder why Curve Finance (CRV-USD) is looking to toss its hat into the ring with its very own stablecoin offering.
Part of the stablecoin niche’s recent popularity is most certainly due to macroeconomic conditions facing both crypto and the broader investing sphere. Bonds, stocks, even fiat values, are sinking currently as a result of rising interest rates, inflation and other factors. Crypto is no different, and the crash early this summer compounds into a devastating blow. Today, investors are seeing the market return to the same lows as when this bear market started. Bitcoin (BTC-USD) prices have sunk back below $19,000, and the global crypto market capitalization is once again south of $1 trillion.
Stablecoins, for the most part, have remained the only safe bet within the space. Their pegged values offer refuge from volatile price movement, which has been almost entirely downward in recent weeks. Users can also put these assets to work on DeFi platforms to keep earning.
With these factors in mind, investing strategies have gravitated toward getting the full use out of stablecoin holdings. And depending on which stablecoin one might be using, they might get more use out of specific platforms. Say, Binance (BNB-USD) users might get more use out of Binance USD (BUSD-USD) than they would USD Coin (USDC-USD). With this in mind, it seems DeFi platforms are starting to up network usability with their own stablecoins.
Curve Finance Unveils Plans for New Stablecoin Offering
Curve Finance developers are taking notice of the hot stablecoin market, and they’re looking to capitalize on it. News today shows the platform plans to roll out its own stablecoin offering, native to its robust staking platform.
In July, Curve made its plans known to release a stablecoin, dubbed crvUSD. This week, it has taken its first steps toward realizing this plan, uploading the preliminary code for the stablecoin on GitHub. As of yet, the details are few and far between as of yet. The code shows plans for several smart contracts to structure the stablecoin.
The token, according to the initial announcement, will be an over-collateralized one, similar to Dai (DAI-USD). The team’s plan is to hold reserves in crypto, and ensure that these reserves remain greater in value than the amount of crvUSD set to circulate, guaranteeing its $1 peg. Initial murmurs about the token suggested it could be released at some point in September.
This news is part of a natural progression for Curve Finance. The project has become one of the largest DeFi platforms in the world, with over $5.5 billion in total value locked (TVL). Being primarily used to trade stablecoin liquidity, it’s only sensical that developers seek to employ a native stablecoin asset for its users. Though, investors aren’t sure exactly of what crvUSD’s purpose will be. After all, no decentralized exchange (DEX) has issued a stablecoin before; this will be a first. The only thing to do is wait for more details ahead of the token’s release.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.