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LibraryCredit and stable value2022Design paperCorpus record

Curve stablecoin design

crvUSD design. Michael Egorov.

A stablecoin lent against volatile collateral, where liquidation is a continuous trade into a special pool rather than a one-shot auction. The paper calls that pool LLAMMA. A peg keeper and a monetary-policy rate sit beside it. Simulations in the paper are not a promise about later losses.

The Curve stablecoin design liquidates continuously. Collateral sits in bands of an AMM called LLAMMA and is converted as an oracle price moves, instead of being sold in one auction. A peg keeper and a borrowing rate try to hold the stablecoin near its reference. The paper's simulation is not a loss guarantee.
Evidence
Primary paper
Re-measured
No
Assumptions
4
Records linked
10

Code

Source, repository, and what is actually hosted

  • Curve Finance, 2022https://docs.curve.finance/pdf/whitepapers/whitepaper_curve_stablecoin.pdf
  • The source URL is not a GitHub repository. No code remote is invented.
  • Full text is not mirrored. Public availability is not a licence to copy the file onto this site.
  • Add to a reading list

01 Claim ledger

What the paper is allowed to say

Each row is a sentence already in the study. The status is the same on every row: a model claim, not a live measurement.

  1. Claim 01 · Paper model

    Bands, not a cliff

    A price move converts part of the collateral. A bounce can convert some of it back. That is the difference from a vault that auctions everything once a line is crossed.

  2. Claim 02 · Paper model

    The oracle is still required

    LLAMMA reacts to an external price. It is not itself the oracle. A wrong oracle moves the bands wrongly, continuously.

  3. Claim 03 · Paper model

    The peg keeper is a trader

    When the stablecoin leaves its peg against a reference coin, the design trades inventory to push it back. That inventory is finite.

  4. Claim 04 · Paper model

    The rate is a policy

    Borrowing cost changes with the peg. The paper states the direction. It does not state a number you can treat as a market quote for all time.

02 Three cuts

Observation, model, falsifier

A desk does not stop at the summary. Each claim is cut three ways, using only this study's own assumptions and checks. Nothing here is a new figure.

  1. 01 Bands, not a cliff

    Observation

    What the study says

    A price move converts part of the collateral. A bounce can convert some of it back. That is the difference from a vault that auctions everything once a line is crossed.

    Model

    What has to hold

    The oracle updates inside the time the bands were built for. A gap through every band is the failure the design is trying to soften, not a case it cannot see.

    Falsifier

    What would retire it

    What oracle moves the bands?

  2. 02 The oracle is still required

    Observation

    What the study says

    LLAMMA reacts to an external price. It is not itself the oracle. A wrong oracle moves the bands wrongly, continuously.

    Model

    What has to hold

    The oracle updates inside the time the bands were built for. A gap through every band is the failure the design is trying to soften, not a case it cannot see.

    Falsifier

    What would retire it

    What oracle moves the bands?

  3. 03 The peg keeper is a trader

    Observation

    What the study says

    When the stablecoin leaves its peg against a reference coin, the design trades inventory to push it back. That inventory is finite.

    Model

    What has to hold

    Reference liquidity for the peg keeper exists. An empty reference pool cannot defend a peg.

    Falsifier

    What would retire it

    What is left for the borrower after a dip and a recovery, in the design?

  4. 04 The rate is a policy

    Observation

    What the study says

    Borrowing cost changes with the peg. The paper states the direction. It does not state a number you can treat as a market quote for all time.

    Model

    What has to hold

    The stablecoin is not a claim on bank deposits. Nothing in the design adds that claim.

    Falsifier

    What would retire it

    Is a simulation being quoted as a guarantee?

03 Sequence

One action, as an operating tape

  1. 01A borrower posts collateral and receives stablecoin, within the design's limits.
  2. 02Collateral is placed into LLAMMA bands around the oracle price.
  3. 03If the oracle price falls, bands trade collateral toward the stablecoin.
  4. 04If the oracle price recovers, bands can trade back, at a cost the paper discusses.
  5. 05If the stablecoin itself leaves its peg, the peg keeper and the rate are the other two levers.

04 Load-bearing

The argument, and where a pitch drops it

  1. Smaller loss is not no loss

    The cut

    The PDF simulates historical ether prices and argues that a short, shallow dip destroys less collateral than a hard liquidation. A simulation inside a design note is not a promise about the next dip, and it is not a track record of a live system.

    Why it carries weight

    If this cut is skipped, the paper's name is being used without the mechanism that makes the name mean anything.

    Where it is dropped

    Soft liquidation can still lose value. The paper argues the loss is smaller in its simulation. It does not set that loss to zero.

  2. Three mechanisms, not one

    The cut

    LLAMMA, the peg keeper and the rate do different jobs. A summary that says 'the AMM keeps the peg' has merged them and lost the oracle.

    Why it carries weight

    If this cut is skipped, the paper's name is being used without the mechanism that makes the name mean anything.

    Where it is dropped

    Oracle failure, parameter changes, and later governance are outside the theorems, because the paper is a design note rather than a formal proof.

05 Register

What has to be true

  • Model · Not re-measured

    The oracle updates inside the time the bands were built for. A gap through every band is the failure the design is trying to soften, not a case it cannot see.

  • Model · Not re-measured

    Reference liquidity for the peg keeper exists. An empty reference pool cannot defend a peg.

  • Model · Not re-measured

    Parameters are those of the deployment. The PDF uses examples.

  • Model · Not re-measured

    The stablecoin is not a claim on bank deposits. Nothing in the design adds that claim.

06 Divergence

What happened after the paper

crvUSD is the later system built from this note. Read the PDF for LLAMMA and the peg keeper. Read Maker and Liquity for the auction and the stability pool, which are different answers to the same liquidation question. Do not mix their loss stories.

A later client, parameter set, or reward formula is a different object. Cite this paper for the mechanism. Cite a primary release for the network. This desk has not re-run the proof.

07 Pre-mortem

What to check before you use the idea

  5. 0 of 4 marked on this browser. A mark is a reading note, not a pass, a rating, or a recommendation.

08 Anatomy

The paper, in the order a builder needs

The problem it names

A vault that liquidates all at once can sell into a hole and charge the borrower the whole gap. The design asks whether liquidation can be a band of liquidity that converts collateral to the stablecoin as the price falls, and converts back if the price rises.

What the design proposes

  • LLAMMA: collateral sits in a range of AMM bands and is traded as an external price moves.
  • A peg keeper trades the stablecoin against a reference coin when the price is off its peg.
  • A rate policy changes the cost of borrowing as the peg moves. The paper states the direction of that response.

How the mechanism is specified

  • The external price is an input. The design needs an oracle. The AMM does not replace that oracle. It uses it.
  • A borrower who is 'liquidated' may still hold a mix of collateral and stablecoin, and may be deleveraged rather than closed. That is the point of the bands.
  • The paper includes a historical simulation of ether. A simulation is an illustration inside the PDF, not a track record.

What this page does not treat as proven

  • Soft liquidation can still lose value. The paper argues the loss is smaller in its simulation. It does not set that loss to zero.
  • The stablecoin is a mechanism claim, not a claim on dollars in a bank.
  • Oracle failure, parameter changes, and later governance are outside the theorems, because the paper is a design note rather than a formal proof.

Why the desk still reads it

Name the oracle, the band, and who loses if the oracle gaps through the band. If the pitch says liquidations cannot lose money, it is not this paper.

09 Lexicon

Terms, opened into the record

LLAMMA
The lending-liquidating AMM: collateral is converted across price bands as an oracle moves, rather than in a single auction.
Peg keeper
A mechanism that trades the stablecoin against a reference asset when the market price leaves the peg.

10 Repository

Every linked record on this page

Underlined words open a page that already exists: a concept, a protocol profile, a failure record, or another paper. If a word is not underlined, this desk does not have a record for it.

Protocols

This is Blockchain Lab's reading of a public design paper. It is not the paper, not a copy of it, and not an offer of tokens, equity, custody or a partnership. Later network behaviour can diverge from the text. Nothing here is investment, legal or technical advice.

Research status: Design paper. Last reviewed: 1 October 2026. This is a reading of a public paper, not investment, legal or security advice.