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 launched Llamalend v2 on Optimism on June 10, 2026, ending the crvUSD-only lending restriction. Users can now use multi-asset pairs and Curve LP tokens as collateral. Optimism Foundation granted 250,000 OP tokens for liquidity incentives. Mainnet deployment expected in H2 2026.

Curve founder Michael Egorov proposed a market-based plan to resolve about $700,000 in LlamaLend bad debt by tokenizing distressed lender positions and letting traders price them via a dedicated Curve pool instead of relying on a DAO bailout.