Curve introduced Llamalend v2, a lending framework that extends its non-custodial infrastructure beyond crvUSD into a broader system of isolated markets built around Curve liquidity. The release removes the v1 requirement that crvUSD be the borrowed asset, letting the DAO approve markets that pair any two supported assets. It also makes Curve's range-based LLAMMA liquidations available by default across all assets, converting collateral gradually within a liquidation zone rather than at a single cliff-edge price.
The v2 design lets Curve LP tokens serve as collateral, so a user can supply liquidity to a Curve pool, keep earning trading fees, and borrow against that position simultaneously. The model also extends to yield-bearing vault tokens and fixed-yield principal tokens. Each market stays isolated with its own parameters, caps, and oracle setup, and non-crvUSD markets can carry an admin fee that flows to the Curve DAO. Borrow caps start at zero pending governance approval, with LlamaRisk reviewing proposed markets ahead of governance.
Llamalend v2 launches first on Optimism with three isolated markets, ETH/wstETH, wstETH/USDC, and WBTC/USDC, each deployed with zero borrow caps to validate parameters before borrowing is enabled. A Merkl-powered incentive campaign will distribute 100,000 OP tokens across the initial markets, and borrowing turns on once the Curve DAO approves the first cap increases, a roughly seven-day process. Additional v2 markets will deploy on Ethereum mainnet following the Optimism rollout.
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