Curve introduces an on-chain market-based recovery mechanism for bad debts, allowing CRV's damaged claims to be traded for exit or used in the recovery process.

CoinFeed reported on May 1st that Curve Finance officially stated that following the market crash in October 2025, some of Curve Finance's lending markets experienced bad debt issues. Specifically, the Llamalend liquidity pool of CRV-long was impacted by severe price volatility and liquidity contraction, resulting in some depositors facing withdrawal restrictions and asset losses. To address this issue, Curve is introducing a "recovery path" based on an on-chain market mechanism, allowing affected users to choose from different strategies: directly sell their claims to exit, continue holding and wait for potential recovery, or provide liquidity to earn fees and incentives.