The Curve team proposed restoring the bad debt in the CRV-long LlamaLend market via a special liquidity pool.

The Curve Team has proposed a recovery plan for the bad debt in the CRV-long LlamaLend market. This market incurred approximately 70% collateralization and a funding shortfall of roughly $700,000 following the incident on October 10, 2025. The proposal outlines establishing a special Curve stableswap pool that enables redemption of treasury tokens, thereby introducing market-driven capital into the recovery process—without requiring permission or off-chain agreements. According to the proposal, if CRV’s price rises, the bad debt positions can be gradually recovered through decentralized liquidation and hard liquidation; if CRV’s price falls, the collateralization level of treasury deposits will not deteriorate further. michwill has also requested that Curve DAO approve a gauge for this pool and retain protocol fees received in the form of treasury tokens.