Collateralization under stress
crvUSD (Curve Stablecoin)'s assessment for RD-F-068 — scored yellow on the v1.7.0 rubric. The evidence below is the curator's reasoning for this score.
Evidence summary #
crvUSD is over-collateralized by design (~160% average collateralization per Exponential DeFi analysis). CDP markets passed the June 2024 stress test (CRV -28-30%) without bad debt — collateral was high-quality (ETH, BTC, LSDs). However: the PegKeeper deviation-check failure during June 2024 demonstrated that crvUSD price can spike above $1 during liquidation cascades, making hard-liquidation repurchase more expensive and creating a theoretical path to under-collateralization via price distortion. The October 2025 flash crash produced only a minor $1.02 depeg, suggesting post-June 2024 remediation improved resilience. Stress scenario (40%+ ETH+BTC simultaneous drop + PegKeeper failure) represents a low-probability but non-trivial tail risk. Scoring yellow (not red — no breach to date; not green — the PegKeeper failure mode is documented and remains architecturally open).
Sources #
- URLCurve Market Health Scores Methodology — LlamaRiskLlamaRisk market health methodology — collateral ratio scoring frameworkretrieved 2026-05-16
- crvUSD Upward Depeg (June 12, 2024) Incident Report — LlamaRiskLlamaRisk incident report — crvUSD upward depeg June 12 2024retrieved 2026-05-16
- LlamaRisk Quarterly Update April-June 2025 — Curve GovernanceLlamaRisk quarterly update Q2 2025 — peg stability improvementretrieved 2026-05-16
Methodology #
Determine whether under curator-defined stress scenario (top-3 collateral assets drop 50%), protocol net collateralization falls below 110%.
See the full factor methodology and distribution across all protocols →