Journalist
Posted:
- Curve Finance is looking to raise interest rates for its crvUSD stablecoin.
- This move is intended to stabilize the coin at $1.
In a move to regain the peg of its stablecoin, crvUSD, to the US Dollar, Curve Finance [CRV] is considering a proposal to raise interest rates.
crvUSD first lost its parity with the US dollar on the 30th of July, when Curve suffered a reentrancy hack. This resulted in the loss of about $70 million from the decentralized finance (DeFi) protocol.
Between July and October, the stablecoin traded below $1. It, however, regained its $1 peg on the 23rd of October before suffering another decline.
The proposal, dated the 21st of November, specifically seeks increments of rates across all markets where the stablecoin is being borrowed.
As per the proposal’s author, the suggested adjustment involves raising the interest rate multiplier for staked Ether [stETH] from 8.6% to 15%, and for Ethereum [ETH] and Bitcoin [BTC], from 0.07% to 11%.
According to the proposal, these adjustments will address the current situation where the market rate is higher and borrowers lend more, thereby keeping crvUSD below $1.
CRV has seen no noteworthy growth in the last month
While the rest of the market has seen gains in the last month, CRV’s price has failed to record any considerable growth. Witnessing severe price fluctuations, the alt’s price has lingered between $1 and $0.98 in the last 30 days.
Source: CoinMarketCap
At press time, CRV exchanged hands at $0.99, per CoinMarketCap’s data.
Its price movement assessed on a daily chart showed that bears had market control. According to CRV’s Directional Movement Index (DMI), its positive directional index (green) at 16.04 rested below the negative directional index (red) at 21.75.
When an asset’s DMI is so positioned, it means that there is more downward pressure on its price.
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Further, CRV’s Moving Average Convergence/Divergence indicator (MACD) showed the trend line above the MACD line at press time. This signaled the presence of severe bearish sentiments in the token’s spot market.
Interestingly, despite CRV’s general bearish outlook, its key momentum indicators showed that token accumulation persisted. At press time, the token’s Relative Strength Index (RSI) and its Money Flow Index (MFI) were at 55.75 and 57.06, respectively.
Source: CRV/USD on TradingView