#tradable instruments

➤ Curve founder Michael Egorov proposed a novel market mechanism to convert bad debt in DeFi protocols into tradable investment products, using the LlamaLend CRV-long market as a pilot. ➤ The proposed model transforms deteriorated positions into instruments with an option-like profile, aiming to recover collateral if asset prices rise, and potentially offering a floor if they fall. ➤ Market reception was mixed, with some users questioning the participation of sophisticated capital without immediate yield, while others saw potential in the unique yield profile of the associated liquidity pools.

➤ Curve founder Mikhail Egorov proposes converting 'bad' debt positions into tradable financial instruments, using LlamaLend as a pilot. ➤ The mechanism aims to resolve protocol debt through market forces, where traders buy debt at a discount, rather than direct DAO treasury intervention. ➤ The proposal faces skepticism from the community regarding buyer interest and the need for potential subsidies.