Will Curve’s stablecoin help CRV overtake UNI, SUSHI?

• Curve Finance’s new stablecoin, crvUSD, showed promise.
• Curve’s TVL declined, but a slight uptick in token growth provided optimism.

As new decentralized exchanges (DEXs) continue to emerge, Curve Finance [CRV] has experienced a significant decline in its market dominance. However, with the introduction of its stablecoin, crvUSD, Curve Finance may regain its footing in the competitive DEX space.

Realistic or not, here’s CRV’s market cap in BTC’s terms

Some stability for Curve?

Parsec Finance’s data reveals that within just 24 hours, the market for crvUSD has attracted 3,000 wstETH (equivalent to $6.5 million) as collateral.

$4.3 million worth of crvUSD has already been generated against this collateral, showcasing a surge in interest for this stablecoin.

In less than 24hrs crvUSD's new market already has 3k wstETH ($6.5m) in collateral and $4.3m crvUSD minted against it pic.twitter.com/ykonxiIjgb

— parsec (@parsec_finance) June 8, 2023

The increased attention on crvUSD can be attributed to the approval of a new proposal on the Curve protocol. This allows users to utilize their stETH holdings as collateral, with Curve automatically minting crvUSD in return.

The value of the minted crvUSD is determined by a portion of the stETH’s value. To maintain the intended $1 peg of crvUSD, users must pay a 6% borrowing rate and face automatic liquidation if the value of the supplied collateral decreases.

These developments hold the potential to enhance Curve’s dominance within the DEX sector. At press time, Curve had captured 10.1% of all volume on DEXs, while Uniswap maintains a market share of 74.1%.

Despite Curve’s popularity and the success of its stablecoin, its Total Value Locked (TVL) has experienced a decline, dropping by 2.3% within the past 24 hours. At press time, the cumulative TVL on the protocol amounted to $4.1 billion.

Nevertheless, Curve outperformed both Uniswap [UNI] and SushiSwap [SUSHI] in terms of TVL, as indicated by Token Terminal. Uniswap’s TVL stood at $3.9 billion at the time of writing, while SushiSwap’s TVL amounted to $368.8 million.

Source: Dune Analytics

Legal troubles

Curve’s dominance in TVL could face challenges due to ongoing lawsuits involving its founder. At press time, a legal dispute was underway in San Francisco, with three prominent crypto venture capital firms accusing Curve founder Michael Egorov of deceptive practices and misappropriation of trade secrets, resulting in financial damages.

These charges have the potential to impact sentiment surrounding Curve, leading to a decline in activity and subsequent TVL.

Is your portfolio green? Check out the UNI Profit Calculator

Regarding tokens, the market capitalization of SUSHI, UNI, and CRV has experienced significant declines over the past month. However, there has been a slight uptick in network growth observed in recent days.

This indicates a growing interest in these tokens among new addresses, suggesting a potential turnaround for these tokens in the future.

Source: Santiment