Curve founder reveals: Will launch overcollateralized stablecoin; crvUSD code undergoing audit, CRV rises by 24%

The venture capital firm SCB 10X hosted a forum in Bangkok, Thailand, where they interviewed Michael Egorov, the founder of Curve Finance, who revealed plans to launch a stablecoin.

The host of the forum was Kevin Koh, co-founder of asset management firm Spartan Group, who asked Egorov:

Why did you create Curve Finance? What is your long-term vision?

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Egorov mentioned that he was a long-time user of MakerDAO, and early DAI had liquidity issues, hence there was a demand for automated market-making of stablecoins.

Regarding the previous conflict between Terra and Maker, where Do Kwon threatened to take down DAI, what are your thoughts?

Egorov stated that this is a competition of different designs. DAI is collateralized by external assets, and they are not affected by the success of DAI; UST is collateralized by LUNA, and the success of UST has a high impact on it. This also puts UST into a death spiral.

Will Curve launch a stablecoin?

Egorov mentioned that it will be over-collateralized, but he cannot reveal too much at the moment.

Is veToken successful?

Egorov indicated that veToken aligns with governance and long-term incentives for users. This mechanism was inspired by disasters that some US companies had experienced in the past.

What will be the regulatory direction?

Egorov mentioned that it is interesting to see if regulators will tighten control over DeFi or CeFi, but it is uncertain if they can distinguish between the two. However, protocols providing clear and understandable messages like, "This is experimental and may not be secure," is beneficial.

Is crvUSD Launching? Will CRV be the Collateral?

From a Discord thread, it is revealed that governance forum moderator Kendrick Llama had teased the upcoming launch of crvUSD on 6/10. Another forum member, PilotVietnam, also mentioned on 7/20 that crvUSD is about to be launched and is currently undergoing code auditing.

Community members are also discussing whether the collateral for crvUSD will be Curve Finance's governance and reward token CRV. However, some are concerned that even with overcollateralization, significant price fluctuations could rapidly devalue the collateral. Given the precedents of UST and LUNA, is this model feasible?

CRV and CVX Price Surge

CRV sees a 24% price surge in 24 hours:

CRV staking protocol Convex Finance's governance token CVX also experiences a 12% increase:

Aave Stablecoin GHO Proposal

Another DeFi protocol, Aave, introduces a stablecoin proposal in early July: GHO, an overcollateralized, decentralized stablecoin that can be minted through a multi-asset pool in the Aave protocol, burned upon redemption, and features the unique concept of Facilitators as incentivizers. This article will explain its mechanism, interest rates, and discount models.