Journalist
Posted:
- Curve Finance wants to increase interest rates on its crvUSD stablecoin.
- This move is intended to stabilize the coin at $1.
In an effort to regain the peg of its stablecoin, crvUSD, to the US dollar, Curve Finance is actively [CRV] considering one proposal to increase interest rates.
crvUSD first lost its parity with the US dollar on July 30, when Curve past a re-entry hack. This resulted in the loss of approximately $70 million from the decentralized finance protocol (DeFi).
Between July and October, the stablecoin traded below $1. However, it regained its $1 peg on October 23 before experiencing another decline.
The proposal, dated November 21, specifically seeks increases in interest rates in all markets where the stablecoin is borrowed.
According to the author of the proposal, the proposed adjustment involves increasing the interest 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 market interest rates are higher and borrowers are borrowing more, keeping the CRVUSD below $1.
CRV has not shown any significant growth in the past month
While the rest of the market has posted gains over the past month, CRV’s price has failed to post significant growth. Given the severe price fluctuations, the alt price has been stuck between $1 and $0.98 over the past 30 days.
Source: CoinMarketCap
At the time of writing, CRV was exchanging hands at $0.99 each CoinMarketCaps facts.
The price movement, assessed on a daily chart, showed that bears were in control of the market. According to CRV’s Directional Movement Index (DMI), the positive directional index (green) at 16.04 was below the negative directional index (red) at 21.75.
When an asset’s DMI is positioned this way, it means there is more downward pressure on its price.
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Furthermore, CRV’s Moving Average Convergence/Divergence indicator (MACD) showed the trendline above the MACD line at the time of writing. This indicated the presence of severe bearish sentiments in the token’s spot market.
Interestingly, despite CRV’s overall bearish outlook, key momentum indicators showed that token accumulation continued. At the time of writing, the token’s Relative Strength Index (RSI) and Money Flow Index (MFI) stood at 55.75 and 57.06 respectively.
Source: CRV/USD on TradingView