Curve Proposes 60M crvUSD Pre-Mint for Yield Basis AMM
Curve’s governance forum is debating a proposal to pre-mint 60 million crvUSD to bootstrap Yield Basis, its new AMM designed to eliminate impermanent loss in Bitcoin pools. Yield Basis plans to borrow the tokens and pair them with BTC for LP positions without selling crvUSD into the market. Supporters say this credit-line approach addresses demand-side absorption, comparing it to PegKeepers. Critics warn that the DAO’s broad minting powers pose upgradability risks and could create dangerous precedents. The debate highlights calls for capped, on-demand minting, explicit pool limits, kill-switches, insurance vaults, and risk fees. Proponents note multiple audits and a Sherlock contest, but governance pushback underscores the need for stronger risk management before scaling crvUSD supply.
Neutral
The proposal’s impact remains uncertain as governance debate continues. Supporters highlight demand-side solutions, while critics stress systemic risks from unchecked minting. Similar past upgrades with large pre-mints have led to volatility, but no final decision has been made. Short-term trading may see heightened volatility around governance votes, while long-term market stability hinges on the implementation of risk controls, capped issuance, and insurance mechanisms before scaling crvUSD supply.