Curve Finance launches Llamalend v2 on Optimism with 250,000 OP token grant

Curve Finance has launched its upgraded lending protocol, Llamalend v2, on the Optimism network, supported by a 250,000 OP token grant. The new version removes crvUSD restrictions, allowing flexible collateral like Curve LP tokens, and introduces a curated market model managed by LlamaRisk. The launch is a phased rollout, starting with lending-only markets, ahead of a planned Ethereum mainnet deployment.

Llamalend v2 launch on Optimism

• ▪Curve Finance has launched Llamalend v2, its isolated lending protocol, on the Optimism network
• ▪The launch on Optimism is the initial phase of a major upgrade to Curve Finance's lending infrastructure

Flexible collateral and borrowing pairs

• ▪Llamalend v2 removes the previous version's restriction to crvUSD pairs, supporting multiple collateral and borrow assets like LP and PT tokens
• ▪The protocol replaces hard liquidations with soft liquidations, which gradually rebalance collateral into the borrowed asset as prices decline

Curve LP tokens as collateral

• ▪Users of Llamalend v2 can use Curve LP tokens as collateral
• ▪Using Curve LP tokens as collateral allows liquidity providers to maintain trading exposure while borrowing against their positions

LlamaRisk market curation model

• ▪As market curator, LlamaRisk provides qualitative evaluations for new collateral, manages the market lifecycle, and sets risk parameters
• ▪LlamaRisk will serve as the market curator for Llamalend v2, a change from v1 where anyone could create isolated markets
• ▪The curated market model is intended to be safer and easier for users, who no longer need to manually evaluate each market's safety

Optimism Foundation grant distribution

• ▪The Optimism Foundation provided a 250,000 OP token grant, worth about $50,000, to support the launch
• ▪The 250,000 OP tokens will be distributed as incentives over approximately two months to bootstrap early liquidity

Phased deployment before Ethereum mainnet

• ▪Deploying on an Ethereum Layer 2 network first is a security strategy to test the protocol in a more contained environment
• ▪A seven-day DAO voting period will determine the borrow caps before the markets become fully operational, with a rewards campaign planned for June 16, 2026
• ▪At launch, Llamalend v2 markets on Optimism have a zero borrow cap, allowing users only to lend
• ▪The Optimism deployment precedes a planned release on the Ethereum mainnet, expected in the second half of 2026