November 28, 2023: Double Digits 📈💸
Observe the most severe rate hike in $crvUSD's history
Buckle up… it’s about to get predatory…
The lever has been thrown, and crvUSD borrowers ran smack dab into a vertical wall.
Double digit interest rates on nearly every market! wstETH rates above 20%!
Only tBTC has temporarily forestalled the carnage, thanks in part to a front-run of sorts… a power user who apparently noticed the trends and jumped ship early…
Yet tBTC only delayed the pain. Double digit rates across the board are incoming…
Similarly, don’t be fooled by sfrxETH rates beneath its vanilla ETH counterpart…
If you want to yield farm on Curve, it’s now more difficult to do so profitably through a $crvUSD loan. Consider the Peg Keeper pools… even if you max your boost, the best you can do is 14.8%, painfully close to the ~13.5% on WBTC/ETH borrow rates.
As a result, we’ve already seen the price of $crvUSD repeg quickly, even before the switch was thrown. Degens were already anticipating the adjustment and prices began adjusting the past few days.
For the sake of the TUSD peg keeper, $crvUSD is actually now the minority share of the pool, thanks perhaps to some well-timed TUSD FUD
The overall supply of $crvUSD has, of course, taken a slight hit. It’s dropped from an all time high around $158MM down to $152MM, a modest 4% drop as its trimmed its excess Thanksgiving waistline.
If you’re interested in a deeper dive into the mechanics of $crvUSD borrow rates, we recommend this lengthy explainer by @0xstan:
We don’t know how long the standoff between borrowers and high rates will persist, but if borrowers do persevere in keeping their loans active, it would amount to a record harvest for veCRV farmers.
