# LlamaLend

Llamalend is the lending engine that powers CurveUSD, the decentralized stablecoin by Curve Finance.

Unlike traditional lending systems that rely on hard liquidation thresholds, Llamalend introduces a unique approach called **LLAMMA** (Lending-Liquidating AMM Algorithm), which enables soft liquidations and smoother price stability.

> LLAMMA is a new kind of automated market maker that acts like a lending + liquidation system rolled into one.\
> \
> Instead of waiting for your collateral to hit a risky price and then liquidating it suddenly (like Aave or Maker would), LLAMMA:
>
> * Gradually sells your collateral into CurveUSD as its price drops
> * Gradually buys it back as the price recovers<br>
>
> This creates a more stable experience for borrowers and avoids the painful liquidation spikes.

How LlamaLend works:

* You deposit collateral (like wstETH, sfrxETH, or ETH)
* You borrow CurveUSD against it
* Behind the scenes, your collateral is placed in a LLAMMA band, which defines a price range
* If the price drops into that band, your collateral starts being converted into CurveUSD
* If the price rises again, it’s converted back to the original token

This means your position is constantly being rebalanced based on market movement without harsh liquidations or big penalties.

***

## Related Articles:

* [Dashboard & Use-case](https://help.defisaver.com/protocols/llamalend/dashboard-and-use-case)
* [Compatibility & Automations](https://help.defisaver.com/protocols/llamalend/compatibility-and-automations)