Curve proposes solution for Llamalend bad debt

Curve Finance (CRV) has proposed a solution to address bad debt within its lending system, Llamalend. The core of the proposal involves creating a Curve Stable Swap pool to facilitate the exchange of Vault tokens, aiming to attract external capital. This system is designed to operate without requiring separate approvals or over-the-counter contracts. The pool is structured to gradually resolve the bad debt; as the price of CRV rises, distressed positions will be forcibly liquidated. Conversely, the design ensures that the Vault's collateral ratio will not worsen if the CRV price falls.