KEY TAKEAWAYS
- Curve DAO integrates Mountain Protocol’s USDM stablecoin into the crvUSD PegKeeper system, setting a 10 million crvUSD debt ceiling.
- USDM, a regulated stablecoin backed by US Treasuries, enhances crvUSD’s peg stability with its unique rebasing mechanism.
- The DAO offboards TUSD from the PegKeeper system due to regulatory concerns, showcasing its adaptability to stablecoin risks.
- The USDM/crvUSD pool offers attractive returns, supported by a Reward Gauge and Mountain Protocol’s liquidity growth initiatives.
The Curve DAO has successfully approved and implemented a significant governance proposal to integrate Mountain Protocol’s USDM stablecoin into the crvUSD PegKeeper system. This integration, executed on October 23, establishes a 10 million crvUSD debt ceiling for USDM, marking a new expansion of Curve’s crvUSD ecosystem.
PegKeepers play a crucial role in maintaining the dollar peg of crvUSD. The addition of USDM, a regulated, interest-bearing stablecoin issued by Mountain Protocol, enhances this system. USDM features a unique rebasing mechanism that delivers yields exclusively from short-term US Treasuries, with recent returns averaging 5%. Launched in August 2023, USDM currently maintains a total supply of approximately 58.6 million, with 42.5 million on Ethereum and an additional 16.1 million on Layer 2 solutions.
USDM distinguishes itself by being overcollateralized with US Government bonds, passing on the interest it receives from these investments to its token holders. The governance proposal implements three key changes, positioning USDM alongside other major stablecoins in the crvUSD PegKeeper system.
Restructuring and Offboarding TUSD
As part of this restructuring, the DAO voted to offboard TUSD from the PegKeeper system, reducing its debt to zero due to regulatory and solvency concerns. This decision reflects Curve DAO’s agility in adapting to evolving stablecoin risks and opportunities.
The USDM/crvUSD pool currently offers compelling returns for liquidity providers, with the recent introduction of a Reward Gauge and the commitment by the Mountain Protocol team to promote the pool. This integration strengthens crvUSD’s peg stability by enhancing the PegKeeper system.
The addition of USDM brings Treasury-backed yield generation to Curve’s stablecoin infrastructure, backed by Mountain Protocol’s commitment to promote liquidity growth. More details about the proposal and its execution can be found here.
Disclaimer: The views expressed in this article are those of the authors and do not necessarily reflect the official policy of CoinsHolder. Content, including that generated with the help of AI, is for informational purposes only and is not intended as legal, financial, or professional advice. Readers should do their research before taking any actions related to the company and carry full responsibility for their decisions.
