Curve deploys Llamalend v2 on Ethereum, with borrowing to open after DAO approvals

From Optimism rollout to Ethereum launch

According to Curve, Llamalend v2 first went live on Optimism, where OP incentives helped early markets attract supply and borrowing while the team tested contracts, frontend systems, oracles and reward infrastructure in production. Ethereum was presented as the next planned stage of that rollout.

On Ethereum, the initial markets are being deployed with borrow caps set to zero. That means users can supply assets from launch, while borrowing will be enabled one market at a time only after the Curve DAO approves initial caps. Curve said governance proposals typically take about seven days from creation to execution.

How v2 changes the lending model

The main change in Llamalend v2 is that Curve lending is no longer limited to markets that require crvUSD on one side. The upgrade allows a broader set of borrowed assets and collateral types, including supported Curve LP tokens. That means liquidity positions can be used as collateral, provided the relevant market has suitable liquidity, oracle design and parameters.

Curve said each market remains isolated. Every market has one collateral asset, one borrowed asset, its own lender vault, oracle, interest-rate model, caps and risk settings. The protocol argues that this keeps credit and collateral risk contained within a single market instead of spreading it across unrelated assets.

The company also said v2 can support productive collateral and higher loan-to-value configurations. In the case of supported LP tokens, borrowers can pledge a pool position while that position continues to earn trading fees.

Liquidity, pricing and liquidation design

Curve framed the new version as a closer link between its exchange and lending infrastructure. A Curve pool can serve several roles around the same asset pair, including secondary trading, oracle pricing and routes used to manage liquidations, while Llamalend adds borrowing and lending around that liquidity.

Where suitable, Curve said a pool can provide EMA-based oracle input as well as a liquid market for the collateral asset. Each Llamalend market also includes its own LLAMMA, a mechanism that gradually converts collateral into the borrowed asset across a range of prices rather than waiting for a single liquidation threshold.

Curve stressed that this range-based process should not be treated as protection from liquidation. Losses can still build while a position remains inside the conversion range, and a loan can still face hard liquidation if its health falls to zero. The protocol said the feature is intended as a risk-management tool, not a guarantee.

Gradual market activation

Curve said interest paid to suppliers depends on utilization, so lenders should not expect borrowing-based yield until caps are turned on. Any separate incentives, where available, will be shown in the Curve interface.

The protocol also said borrow caps may be increased gradually through governance as liquidity, demand and market behaviour become clearer. It added that v2 is designed to support the selective migration of some v1 lending and crvUSD mint markets to newer infrastructure and expanded controls, rather than activating every possible asset pair at once.

The Ethereum deployment marks the next step in Curve’s effort to build lending markets directly around its liquidity pools while expanding beyond the crvUSD-only structure used in Llamalend v1. For now, the rollout remains staged, with supply available first and borrowing to follow as individual governance proposals pass.