Curve Finance DAO to vote on WETH collateral for crvUSD

The Curve Finance DEX community was invited to back the addition of wrapped Ether (WETH) as collateral for borrowing the stablecoin crvUSD. 

Vote for non-staked ETH collateral just dropped in

* https://t.co/YBEYNKSzoB
* https://t.co/6UKq9XxVEB
* https://t.co/LmgS9fcb9P

— Curve Finance (@CurveFinance) June 19, 2023

The debt ceiling for WETH collateral is set at $200 million.

In May, the DeFi project launched on the Ethereum mainnet a decentralised stablecoin. The crvUSD launch did not go smoothly — due to an integration error a redeployment of the smart contract was required.

The stablecoin uses a collateralisation model similar to DAI from the platform MakerDAO. 

The stablecoin is built on the Lending-Liquidating AMM (LLAMMA) algorithm, which continuously liquidates and automatically deposits collateral to manage risk and maintain parity with the US dollar.

The first collateral asset for the issuance of crvUSD was the staked Ether sfrxETH from the Frax Finance protocol. 

In early June DAO Curve enabled the ability to borrow the stablecoin against collateral in the wrapped version of stETH from Lido. The debt ceiling for the asset is $150 million, while for sfrxETH — just $10 million.

As of writing, users had borrowed 28.51 million crvUSD against wstETH collateral. The total supply of the stablecoin is 39.8 million coins.

In May it emerged that Curve CEO Michael Egorov and his wife purchased two villas worth about $40 million in Melbourne.

Against this backdrop, concerns arose in the Aave DeFi community about the entrepreneur’s large debt position collateralised in Curve DAO (CRV) tokens.    

However, users unanimously rejected the proposal to lock collateral in CRV.