CoinDesk reported, citing data from Curve Finance, that the protocol’s lending market has recorded 704 soft-liquidation events involving 602 borrower addresses. The median duration was 14.5 days, while one quarter of cases lasted at least 38.9 days. Some positions remained in the liquidation band for months. Of the total, 476 soft liquidations began in the first half of 2026. Curve uses its LLAMMA mechanism rather than the one-shot liquidation model seen in lending protocols such as Aave and Compound. Under that system, collateral is gradually converted into the borrowed asset as prices move through a range, and the process can partly or fully reverse if prices recover before the loan completely fails. The data also shows that soft liquidation still carries costs for borrowers, including trading fees, conversions, rebalancing, interest, and losses tied to price moves in both directions. Curve Finance, a DeFi protocol focused on stablecoin trading and crvUSD lending, currently holds about $1.35 billion in deposits, with roughly $3.4 billion in DEX volume over the past 30 days and about $46 million in active loans.
Curve Finance’s lending market has recorded 704 soft-liquidation events involving 602 borrower addresses, according to CoinDesk, which cited data from the protocol.
The median duration of those events was 14.5 days, and one quarter lasted at least 38.9 days. Some positions stayed inside the liquidation range for months. Of the 704 cases, 476 started in the first half of 2026.
LLAMMA converts collateral gradually
Unlike traditional lending protocols such as Aave and Compound, Curve’s LLAMMA system does not sell collateral all at once after the collateral price drops below a threshold. Instead, it gradually converts collateral into the borrowed asset across a price range.
If the price recovers before the loan fully fails, part or all of that conversion can be reversed. That means borrowers are not in a grace period: part of their collateral has already been liquidated while the loan remains open, even though the position may recover if the market turns back in their favor.
Soft liquidation still comes with costs
The mechanism does not eliminate losses. The data shows borrowers can still be hurt by trading fees, conversions, rebalancing, interest, and price swings in both directions. If market conditions remain unfavorable, a position can still end up in hard liquidation.
Curve’s current scale
Curve Finance is a major DeFi protocol focused on stablecoin swaps and crvUSD lending. It currently holds about $1.35 billion in deposits, has generated roughly $3.4 billion in DEX trading volume over the past 30 days, and has about $46 million in active loans.
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