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      Curve Finance Reports 704 Soft Liquidation Events in 2026

      Curve Finance, a decentralized finance (DeFi) protocol known for stablecoin exchanges and crvUSD lending, has recorded 704 soft liquidation events involving 602 borrower addresses in 2026. The data indicates that these events have a median duration of 14.5 days, with a quarter lasting at least 38.9 days, and some positions remaining in a liquidation state for several months. Notably, 476 of these soft liquidations began in the first half of 2026.

      The soft liquidation mechanism utilized by Curve's LLAMMA system differs from traditional lending protocols like Aave and Compound. Instead of liquidating collateral all at once when prices drop below a certain threshold, Curve's system gradually converts collateral into borrowed assets within a specified price range. This approach allows borrowers the chance to restore their positions if market prices rebound before the loan fails completely, although it does not provide a grace period as collateral is partially liquidated during the loan's duration.

      Despite the potential for recovery, borrowers face costs associated with transaction fees, conversions, rebalancing, interest, and bid-ask price fluctuations. If market conditions remain unfavorable, there is still a risk that positions may enter hard liquidation. Currently, Curve Finance holds approximately $1.35 billion in deposits, with a decentralized exchange trading volume of about $3.4 billion over the past 30 days and active loans totaling around $46 million.

      © 2026 KLEA News. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

      Source: KLEA News

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