- Curve Finance is looking to raise interest rates for its crvUSD stablecoin.
- This move is intended to stabilize the coin at $1.
In a move to regain the peg of its stablecoin, crvUSD, to the US Dollar, Curve Finance [CRV] is considering a proposal to raise interest rates.
crvUSD first lost its parity with the US dollar on the 30th of July, when Curve suffered a reentrancy hack. This resulted in the loss of about $70 million from the decentralized finance (DeFi) protocol.
Between July and October, the stablecoin traded below $1. It, however, regained its $1 peg on the 23rd of October before suffering another decline.
The proposal, dated the 21st of November, specifically seeks increments of rates across all markets where the stablecoin is being borrowed.
As per the proposal’s author, the suggested adjustment involves raising the interest rate multiplier for staked Ether [stETH] from 8.6% to 15%, and for Ethereum [ETH] and Bitcoin [BTC], from 0.07% to 11%.
According to the proposal, these adjustments will address the current situation where the market rate is higher and borrowers lend more, thereby keeping crvUSD below $1.
CRV has seen no noteworthy growth in the last month
While the rest of the market has seen gains in the last month, CRV’s price has failed to record any considerable growth. Witnessing severe price fluctuations, the alt’s price has lingered between $1 and $0.98 in the last 30 days.
Author: Abiodun Oladokun
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