While all attention is focused on the fall in the Bitcoin price and the crypto market in general, the DeFi sector continues to progress and presents with it investment opportunities. This time it’s Curve’s turn to get a bullish boost.
Global DeFi giant Curve Finance has teamed up with another industry giant, Aave, in a race to create a decentralized and over-collateralized stablecoin. This creation of a new decentralized stablecoin is partly motivated by the idea of offering another alternative to Maker’s hegemony, in addition to granting itself a plump piece of cake in the process.
So, within 24 hours, the Curve DAO (CRV) token rose more than 20% to surpass $1.45 per token.
Its growth started from $1,202, although over the past month and especially the past few days, the value of the token has steadily increased. The reasons for the rise: new leaks and hints of Curve’s next decentralized and over-collateralized stablecoin.
The fact that an insinuation like this could trigger such a large rally shows how hungry crypto investors are for opportunity, which goes against the winter the market is currently going through.
It is possible that bulls as well as market sentiment have been supported by Bitcoin’s recent rise as well as other positive crypto buying news, such as Galaxy Digital’s recent purchase of Ethereum for $1 billion. dollars.
Details remain scant on Curve’s new stablecoin
The launch of an over-collateralized stablecoin was confirmed by Michael Egorov, the founder of Curve, during a web3 summit. Indeed, when asked if Curve was going to launch a stablecoin, he answered specifying: “over-collateralised”. That’s all I can say for now”.
Mr. Egorov spoke with The Spartan Group co-founder and managing director, Kelvin Koh, who asked him about the long-term vision of his famous AMM. Yegorov replied that an MA for stablecoins was needed, among other things. For now, the secret remains well kept, as only a few rare details have been revealed so far.
It is possible that it will be issued against the liquidity provider’s positions, which would have liquidity benefits, Egorov said during the conversation.
Will the market accept another crypto-collateralized stablecoin after Terra’s UST?
Since the parity loss of TerraUSD (UST) and the subsequent collapse of Luna and the Terra ecosystem, the future of decentralized stablecoins has been hotly debated.
The regulators have used this disastrous case as a form of trigger to regulate the crypto market more insistently. However, decentralized finance today remains a very complex market for regulators.
The Bank for International Settlements (BIS) has clarified that regulation of DeFi (decentralized finance) should be “technology-neutral”, thus admitting that cryptocurrencies will be regulated first and DeFi second when tools exist. effective for this purpose.
Lawmakers indeed consider the DeFi sector as a kind of “Wild West”; however, they recognize that innovative financial services have benefits. Mr. Egorov said in this regard:
“It will be interesting to see if regulators get tougher on DeFi or CeFi. I’m not sure regulators can distinguish between the two, but clear, digestible messages in protocols are a good thing, like ‘Experimental, insecure’, for example”.
Since the fall of the UST, the crypto market may have changed somewhat, especially the stablecoin sector. Indeed, the latter will be forced into a greater exercise of transparency and explanation concerning the ins and outs of its operation, in order to convince the public that it is preferable to use decentralized stablecoins rather than stablecoins backed by fiats.
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