Curve Finance has implemented a fee switch for its crvUSD stablecoin to enhance adoption and ecosystem engagement, according to a statement released on June 28.
Launched in 2023 by the DeFi protocol, crvUSD has faced adoption challenges. However, Curve noted that crvUSD has become an outstanding fee generator, outperforming all other Curve DEX pools by a factor of two.
This impressive performance, along with the convenience of fee distribution in crvUSD, fueled the community’s desire to adopt this new fee model.
Why fee switch
The fee switch to crvUSD aims to encourage users to engage more with other ecosystem products and services. The new fee distribution is also expected to create an extra supply sink for the stablecoin. Uncollected fees may add to the supply, increasing the overall total value locked (TVL).
Curve Finance founder Michael Egorov stated that the fee switch shows the platform’s confidence that the stablecoin will support its ecosystem growth. He said:
“By aligning fee distribution with crvUSD, the platform not only enhances its operational efficiency but also strengthens the foundation for future growth and adoption within the DeFi landscape.”
Egorov added that this move signals to users that the stablecoin is stable and fully operational, addressing any potential concerns about its stability and safety.
Curve Finance is a decentralized exchange offering stablecoin yield opportunities and has faced significant challenges recently. Its founder’s substantial borrowing against the CRV token recently resulted in significant liquidations across various platforms.