crvUSD is Curve's stablecoin, minted against collateral in isolated markets with a liquidation mechanism unlike anything else in DeFi. Everything backing it is visible on-chain, which is a property most stablecoins of comparable size cannot claim.
Soft liquidation and peg keepers
As collateral falls in value, LLAMMA converts it progressively into crvUSD rather than triggering an all-or-nothing liquidation, and reverses if the price recovers. Peg keepers mint and burn crvUSD into Curve pools to maintain the peg mechanically. Both are novel and both have worked in normal conditions.
What the 2024 episode showed
When very large CRV-collateralised borrowing positions unwound, bad debt appeared in specific markets — the collateral could not be liquidated at the modelled price because the position was too large relative to CRV's liquidity. The mechanism functioned as designed; the collateral concentration was the problem. That is a risk parameter question, and it is worth checking what backs the markets you rely on.
Scale
Supply and liquidity are modest relative to the major stablecoins, so crvUSD is more useful as a borrowing instrument within the Curve ecosystem than as a general-purpose dollar.
Who should use it
Borrowers wanting soft liquidation on Curve collateral, and users who value fully verifiable on-chain backing over liquidity.