The strange part is that these borrowers were not simply waiting in a grace period. Their collateral was already being converted while the loan remained open, meaning a position could spend days or weeks partly liquidated and still recover if prices turned around.
Curve Finance is a major DeFi trading and lending protocol best known for stablecoin swaps and its crvUSD lending markets. It holds about $1.35 billion in deposits, according to DefiLlama, while its decentralized exchange processed roughly $3.4 billion of volume over the past 30 days.
Curve generated about $4.3 million in fees and $1.15 million in protocol revenue over that period, with roughly $46 million of active loans outstanding.
Soft liquidation is not free, however. The data shows borrowers can still lose money through trading fees, conversions, rebalancing, interest and repeated price moves in both directions.
A position can still fall into hard liquidation if the market keeps going against it. Even when prices recover, the borrower may not end up where they started.
As such, Curve’s data establishes that on this system, crossing into liquidation does not mean a loan is dead, and that hundreds of borrowers spent days or weeks in that state.