This has been a tough week for DeFi.
The LayerZero exploit and the rsETH spillover sparked a broad risk-off movement. Liquidity retreated, assumptions about trust were tested and capital turned away from anything perceived as vulnerable.
Against that background, it makes sense to look at how individual protocols behaved under pressure. Below you will find an overview of what happened within Curve last week.
Market overview
Tested the entire DeFi stack this week. The LayerZero exploit and KelpDAO’s rsETH compromise triggered a widespread risk response and exposed vulnerable trust assumptions in several protocols.
Against that backdrop, Curve held up with remarkable resilience:
- TVL fell just 1.9% to $2.05 billion
- crvUSD maintained a firm peg
- Offer of minted coins expanded by 41%
This is not luck. It reflects the structural design and liquidity depth.
Risk set in motion
The market reprices risk in real time:
- The dependency on external protocols is being questioned
- The quality of the collateral is closely monitored
- safety assumptions are tightened
Curve DAO already responds:
- vote to remove **Aave GHO from PegKeepers
- evaluating the closure of selected Llamalend markets
This is a defensive adjustment, not a reactionary move.
Revenue streams– Where capital moves
crvUSD core pools
Top non-boosted opportunities:
- pmUSD / crvUSD – 11.4%
- $USDT /crvUSD – 4.1%
- frxUSD / crvUSD – 3.9%
- $USDC /crvUSD – 3.2%
Liquidity continues to be concentrated around crvUSD as the base layer.
High Yield USD Strategies
A higher yield is accompanied by a higher complexity:
- $USDC /sJUSD – 20.4%
- ynRWax / $USDC – 17.1%
- ynRWAX / OUSD -15.1%
- sfrxUSD via Llamalend – 14.9%
Exposure to risk-weighted assets and synthetic dollars drives return growth.
$ETH And $BTC Positioning
$ETH remains the dominant return asset:
- alETH/WETH on Arbitrum – 9.6%
- weETH / WETH – 6.4%
- OETH structures – 5.6%
$BTC remains more conservative:
- cbBTC / WBTC – up to 2.4%
Capital takes precedence $ETH derivatives due to higher usage and deeper integrations.
crvUSD – The core mechanism
Key statistics:
- Supply increases by 41%
- Price stable at $1
- PegKeepers actively deploy reserves
- DAO makes a profit
What caused this:
Rising $BTC And $ETH Prices increased demand for leverage.
More loans led to higher crvUSD issuance.
At the same time:
- Yield pools absorbed crvUSD
- the supply shifted from scrvUSD
- there was upward pressure on the pin
This is a strong signal of demand-driven stability.
Llamalend – Capital rotation signal
- TVL increased by 15.7%
- Borrowed volume increases by 20.1%
- Collateral increases by 25.6%
Redistributing users from other platforms.
Drivers:
- lower borrowing costs
- stronger confidence in the Curve infrastructure
- instability elsewhere
DEX activity – Volatility drives sales
Curve DEX saw a sharp increase:
- Volume increased 235% to $2.14 billion
- Costs increase 186% to $476,000
- Swaps increase by 18.8%
Market stress translated directly into trading activity and fee generation.
stETH – Primary beneficiary
Demand for sETH increased across all pools:
- large volume increase
- higher compensation generation
- strong presence in derivatives pools
This reflects a shift towards greater trust $ETH collateral after the rsETH incident.
DAO Statistics – Positive Real Return
- veCRV April at 5.25%
- Inflation rate of 4.87%
Holders earn above inflation.
This supports long-term alignment and capital preservation.
Flows and positioning
TVL inflow
- $USDC /crvUSD saw an increase of $96 million
- PegKeepers added liquidity
- capital concentrated in stable pools
Compensation Growth Leaders
- $USDC /RLUSD
- $ETH /stETH
- $USDC /USDtb
Falling segments
- traditional stable pools such as DAI / $USDC / $USDT
Demand is shifting to newer structures.
Strategic takeaways
- Curve continues to act as a base layer for liquidity
- crvUSD is becoming a core mechanism within DeFi
- Capital rotates instead of coming out
Funds are moving toward systems that demonstrate resilience under stress.
In short
This was a stress test for DeFi.
While parts of the market were vulnerable, Curve strengthened its position:
- stable pen under pressure
- growing supply and demand
- strong DEX performance
- positive real return
This is a signal of sustainability, not just short-term performance.
Conclusion
Overall, the week shows a clear pattern.
The market stress has not halted activity. It redirected it. Stable currency flows, $ETH derivatives and credit demand have all adjusted in response to volatility.
Specific to Curve, the data points to continued use of the core primitives even as the broader market revalued risk.
Nothing here suggests isolation from market conditions. But it does show how the system behaves when conditions deteriorate, which is the more relevant signal.