Curve Finance has rolled out Llamalend v2 on the Optimism network, introducing broader lending markets and updated risk management tools as part of a phased deployment that will extend to the Ethereum mainnet in the second half of 2026.
broader markets beyond crvUSD
The new version removes the earlier restriction to crvUSD-based pairs, allowing markets to be created using a wide range of collateral and borrowing assets. This shift significantly expands the protocol’s functionality, enabling traders to design lending markets across a much larger set of digital assets rather than relying on a single stablecoin ecosystem.
risk oversight moves to LlamaRisk
Curve has integrated LlamaRisk as the official market curator, assigning it responsibility for evaluating collateral types and managing market parameters. The firm will conduct both quantitative stress testing and qualitative reviews, introducing a more structured approach to oversight compared to earlier models that relied more heavily on automated or loosely governed systems.
LP tokens unlock new capital use
Llamalend v2 now allows Curve LP tokens to be used as collateral, giving traders the ability to borrow against active liquidity positions without withdrawing funds from pools. This is expected to improve capital efficiency within the ecosystem, though LP token valuation remains complex and can carry risks, including sensitivity to pricing mechanisms.
Optimism launch aims to reduce risk
The initial deployment on Optimism provides a lower-cost, high-throughput environment for monitoring performance before a full rollout on Ethereum. The network has seen rising activity, with onchain crypto card payments reaching $833 million in May 2026, up 180% from a year earlier, and supporting roughly 800,000 daily transactions.
This approach allows developers to observe real-world usage and address potential issues or vulnerabilities under controlled conditions before moving to a higher-stakes mainnet launch.
incentives and governance rollout
To support early adoption, Curve is distributing 250,000 OP tokens, worth about $50,000, over two months to encourage liquidity and participation. Markets will initially launch with no borrowing caps, followed by a seven-day governance vote to set final limits.
Full borrowing functionality and incentive activation are expected to begin around June 16, depending on the outcome of the community vote.
Explore L2 lending narratives and risk tools with Toobit’s DeFi insights in our crypto and DeFi 2025 guide.
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