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Stablecoin exchange service Curve Token (CRV) has risen 11% in the past 24 hours as demand for the decentralized stablecoin market continues to grow.
While Curve does not yet offer native stablecoins, the upcoming Curve USD token (crvUSD) is highly anticipated in crypto circles. Curve plans to launch a dollar-linked asset in June, CoinDesk reported.
Curve seemed to be teasing about the next version of crvUSD on Monday, saying that "CRvUSD will need an ongoing proposal to operate independently." An ongoing proposal would allow stablecoin pools to share price information with external protocols.
This development could come as a boost to traders as demand for CRV is on the rise and the tokens have seen more than $770 million traded on crypto exchanges.
Curve relies on smart contracts instead of intermediaries to provide financial services such as lending, trading and stablecoin lending to users. Curve depositors can earn up to 4% annual returns from multiple pools within the platform.
It is one of the most popular and influential protocols in the crypto community, with $4.6 billion worth of tokens in circulation.
CRV traded above $1 on Tuesday, reaching levels seen in early January and bucking the broader market decline, with Bitcoin (BTC) down 1%. The move comes as decentralized tokens are the ultimate driver of cryptocurrency markets relative to stablecoins.
According to a WSJ report on Sunday, the US Securities and Exchange Commission (SEC) on Sunday declared BUSD an unregistered security. The news comes days after CoinDesk announced that Paxos is being investigated by the New York Department of the Treasury, although the extent of the NYDFS investigation remains unclear.
This has created a downward trend for centralized stablecoins like BUSD, as traders view their decentralized counterparts as less likely to face legal problems in the future.
Decentralized stablecoins rely on a basket of cryptocurrencies, primarily the US dollar, to back them. It could be a stolkcoin peg where another token is issued and permanently withdrawn or burned to support stablecoin trading, or an algorithm to maintain a portfolio where the asset pool is too large.
"crvUSD could be a very interesting development because we haven't seen a stable coin issued by a major DEX," Daniel Zolotin, senior developer of DeFi at Orbi, wrote in a telegram describing crvUSD to CoinDesk. Feasibility
"Connecting Statcoin [decentralized finance] to the main platform can open up some interesting possibilities in terms of new models (such as the use of LP tokens as part of the support system)," Zlotin added: ..." implementing this concept.