Overview
- Curve deployed Llamalend v2 on Optimism as a controlled test that has three isolated markets but keeps borrowing disabled until Curve DAO approves borrow caps and debt limits.
- The upgrade removes the crvUSD-only constraint so markets can pair supported assets on both sides of a loan and allow borrowing in tokens other than crvUSD.
- Curve added support for Curve LP tokens and principal tokens as collateral so liquidity providers can keep earning pool fees while using positions to borrow.
- Llamalend v2 preserves a soft-liquidation, or liquidation-range, model that gradually converts collateral into the borrowed asset as prices move to reduce concentrated sell pressure.
- LlamaRisk will set market-level risk parameters and the Optimism Foundation supplied a 250,000 OP incentive package, with 100,000 OP initially routed via Merkl, as Curve tests the system before a phased H2 2026 mainnet launch.