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The Curve team proposed a recovery plan for approximately $700,000 in bad debts in the CRV-long LlamaLend market

By: rootdata|2026/04/27 09:42:01
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The Curve team has published a proposal on the governance forum, addressing approximately $700,000 in bad debt generated by the CRV-long LlamaLend market, proposing a recovery mechanism based on the free market.

This mechanism utilizes the option characteristics of the CRV-long treasury assets: when the price of CRV rises, the value of the treasury assets increases, and when the price falls, it does not further depreciate. The proposal suggests establishing a Curve stable pool with a low amplification coefficient (A=2) and a high redemption fee (1%), concentrating the liquidity of the treasury tokens around a repayment capability level of approximately 71%. Arbitrageurs can profit by purchasing treasury tokens through flash loans and conducting partial liquidations.

Curve DAO has been invited to approve incentive measures for this pool, and the management fees collected will be retained in the treasury in the form of treasury tokens. If this mechanism is successful, it will serve as a reference solution for similar situations.

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