TL;DR:
- Curve launched Llamalend v2 on Optimism with a 250,000 OP token grant (~$50,000) from the Optimism Foundation to boost initial liquidity.
- The new version removes the restriction to crvUSD pairs and allows markets with any combination of assets as collateral or debt.
- LlamaRisk will take on the role of market curator, and the deployment on Ethereum mainnet is scheduled for the second half of 2026.
Curve Finance launched Llamalend v2 on the Optimism network, marking the first phase of a deep upgrade to its decentralized lending infrastructure. The deployment was backed by a grant of 250,000 OP tokens —equivalent to approximately $50,000— awarded by the Optimism Foundation to stimulate early liquidity and activity in the protocol during its first weeks.
The main novelty of this version is the removal of the restriction that limited markets exclusively to pairs with crvUSD. From now on, any combination of assets can function as collateral or as a borrowed asset, provided it receives approval from the Curve DAO. This opening considerably expands the protocol’s scope, allowing asset issuers to build lending markets on top of the same liquidity they already operate on the Curve DEX.
Introducing Llamalend v2
A new lending framework built around Curve liquidity
– Use Curve LP tokens as collateral
– Isolated market risk
– Improved range-based liquidations powered by LLAMMA
– Better market securityLaunching first on Optimism.https://t.co/6N74weKk0j pic.twitter.com/cO159UNE5A
— Curve Finance (@CurveFinance) June 10, 2026
Curve: Markets Built on Liquidity
Another central change is the ability to use Curve LP tokens as collateral. Until now, providing liquidity and borrowing against that capital were separate decisions in most DeFi protocols. With Llamalend v2, a user can maintain their exposure to the trading fees of a Curve pool while simultaneously taking a debt position against that capital. Michael Egorov, founder of the protocol, also noted that Pendle PT tokens will be able to function as collateral, enabling fixed-yield strategies with greater capital efficiency.
The range-based liquidation system, introduced in the original version of the protocol, remains as the core design principle. Rather than liquidating positions at a single threshold price, Llamalend gradually converts collateral when its value enters the risk zone, reducing the impact of sharp drops and giving users additional time to react.
Staged Launch and Security Logic
The initial deployment includes three isolated markets: ETH/wstETH, wstETH/USDC, and WBTC/USDC. All start with a borrowing limit of zero, meaning that in the first hours only lending is possible. Enabling borrowing depends on a DAO vote that takes approximately seven days from publication. The full start of rewards is scheduled for June 16.
LlamaRisk will take on the curation of markets, evaluating collaterals and parameters before each proposal advances through governance. Egorov explained that this model replaces the open design of v1, where any user could create isolated markets — a flexibility that created problems by requiring each user to independently assess the security of every market.
The deployment on Ethereum mainnet is planned for the second half of 2026, possibly one or two months after behavior on Optimism confirms the system’s stability under real usage conditions.
