Seems like we're nearing the release of Curve Finance's very own stablecoin - $crvUSD which, similar to AAVE's $GHO, will unlock a great deal of capital currently siloed within these hubs of liquidity - currently left idle and farming yield. I think this advancement is underappreciated, and really marks progress towards maturity within the defi space. Economic models will always trend towards capital efficiency and this space obeys the same laws, while admittedly evolving at a much faster rate.

Tokenization and application-native stablecoins allow for a layering of leveraged liquidity unique to web3 - which while harmful at times (9,9) - can better the overall depth and interactions within the market. If we lean into the thesis set out by Tokemak, we are playing within the web of value and liquidity pools can be viewed as network equivalents to web2's data "bandwidth". And therefore establishing depth, consistent and cheap liquidity is equivalent to the impact of fibre optic internet on the data layer.

While there's many avenues to explore in bringing about this moment - I do think leverage stacks are one avenue in building out this infrastructure. As mentioned in my prior article, Curve Finance is uniquely important to the Ethereum dApp space, both serving as a savings accounts and a liquidity market. The stablecoin pools and the CRV yield generated effectively acts as a Defi-Adjusted Risk Free Rate. And the introduction of leverage within this sphere will be similar, in my opinion, to the introduction of fractional reserves to banking. We've now largely established group consensus around CRV as a hard yield currency, it is actively upheld by DAOs and therein is situated as a true tokenisation of LP incentive. As the market ebbs and flows, funds return to the gates of Curve with a current, and sticky, TVL of $5billion. crvUSD should transpire a pretty important breakout moment due to it's very sophisticated lending model - which will auto-convert debt positions into stablecoins and back as price of collateral fluctuates. This severely mitigates liquidation risk during flash crashes and for several collateral types will out-right remove the risk of liquidation allowing for incredibly high LTV lending. This should, and very likely will, enable all capital to initially route through CRV-pools where a 95%+ loan can be taken with confidence and used within the broader ecosystem. This is pretty momentous and I fully anticipate DAOs to make use of this as a primary base before utilising their treasury's in whatever proposed manner. Capital efficiency is really about introducing optionality and removing unnecessary forks or dead-ends, and here the fork in the road between providing DA-RF liquidity or speculating is removed while still allowing exposure to both. Given that the fee structure is tentatively placed at 2% - which is all directed towards veCRV holders - that could bring about $100m in annual revenue based on current TVL figures. That's a 20% APY based on current marketcap on top of existing bribes and transaction fees accrued by ve-token holders. Ofcourse, this should have a positive impact on CRV price, which in-turn will bump the dollar APR for liquidity providers.

However, I'd expect the long term impact to be a reduction in CRV pool APY's due to the addition of utility (lending) that is exogenous to pure, mercenary yield farmers. There's still many details to be revealed regarding crvUSD but I fully expect this to be a significant event in Curve's history and strengthens the bull case for CRV overall. It's worth investigating, and I'd be looking at CRV and CVX as top performers once launch details are confirmed.