Curve Finance, the decentralised stablecoin exchange and lending protocol, recorded a 3.1% week-over-week decline in total value locked (TVL) as of July 2, 2026, bringing its holdings to $1.394 billion. The decline arrived alongside two significant governance developments: a major increase to admin fees on its Llamalend v2 lending markets deployed on the Optimism network, and the formal conclusion of LlamaRisk's engagement as the protocol's independent risk partner. Meanwhile, the protocol's top yield pool crossed 100% annualised returns, a figure that warrants context before readers act on it.

Fee Hike and Treasury Sweep

Curve's decentralised autonomous organisation (DAO) voted this week to raise admin fees on its Optimism-based Llamalend v2 markets from 1% to 10%. Admin fees represent the portion of lending revenue distributed to veCRV token holders and the DAO treasury, drawn before the remainder flows to liquidity providers. The tenfold increase channels a larger share of lending revenue to the DAO treasury rather than leaving it entirely with depositors.

In a separate vote, the DAO redirected more than $1 million in previously unclaimed fees from Layer 2 networks into the Curve treasury. This follows a broader governance posture established in mid-2025, when the DAO began reserving 10% of all protocol revenue for its treasury. Unclaimed fees have been a recurring issue for Curve; in 2024, roughly $290,000 was found stranded on Gnosis Chain.

Llamalend v2 launched on Optimism on June 10, 2026, backed by a 250,000 OP token grant from the Optimism Foundation. The upgrade expanded on its predecessor by accepting a wider range of asset pairs beyond crvUSD, the protocol's native stablecoin. It also introduced a key feature for liquidity providers: the ability to use Curve LP positions as collateral while continuing to earn trading fees. Previously, providers had to choose between the two. The protocol continues to use the LLAMMA gradual liquidation mechanism, a core feature of the Llamalend architecture since its original launch, which converts collateral incrementally as prices fall rather than triggering a single forced sale. Worth noting for institutional readers assessing market readiness: the initial Optimism markets launched with zero borrow caps and required a separate DAO vote before borrowing was enabled.

LlamaRisk Steps Away

The more consequential development for long-term protocol health is the departure of LlamaRisk. The firm had worked with Curve since 2021, reviewing proposed lending markets, setting risk parameters such as borrowing limits and liquidation thresholds, and publishing independent research on collateral assets. Under Llamalend v2, LlamaRisk held the formal title of market curator. Its most recent contract ran from April 2025 through April 2026 and was valued at approximately $725,000, funded through a two million CRV token linear vest.

Curve News contributor Saint Rat, who has authored the protocol's weekly reports, wrote simply: "LlamaRisk has now formally concluded its engagement with Curve. We wish them all the best." Saint Rat also noted that time constraints had made the prior week's report difficult to produce, providing some context for the recent publication cadence, and confirmed he will hand over weekly reporting duties to a contributor named Nik beginning in Week 28. No replacement for LlamaRisk has been announced. The absence of a named market curator creates a real governance gap for Llamalend v2, particularly as the DAO considers expanding to Ethereum mainnet, which was targeted for the second half of 2026.

Yield Figures Require Caution

The frxUSD/USP pool on Ethereum mainnet is currently showing an annualised percentage yield above 100%. Yields at this level typically reflect one of two conditions: short-term incentive campaigns designed to attract early liquidity, or pools with very low TVL where rewards are concentrated among few depositors. Both scenarios mean the figure is unlikely to persist. Readers should also note that any yield component paid in CRV carries additional exposure to CRV's token value, which has declined sharply in recent periods; more detail appears in the final section.

The second and third highest-yielding pools, VUSD/msUSD at 35.1% APY and VUSD/crvUSD at 33.2% APY, remain elevated. The identities and backing mechanisms of VUSD and msUSD could not be independently confirmed at publication time. VUSD may be associated with Venus Protocol or a newer project; msUSD may be a money market yield-bearing stablecoin. Readers should verify these tokens against DefiLlama or the issuing protocols' documentation before committing capital to either pool.

Regional Considerations

For users in South Asia, Curve's Optimism deployment is the more practical access point. Transaction costs on Optimism can run 50 to 100 times cheaper than Ethereum mainnet, making smaller positions economically viable for retail participants. For South Asian users who are already liquidity providers on Curve, Llamalend v2's LP-token-as-collateral feature is particularly relevant: it eliminates the opportunity cost of locking up capital, allowing LPs to borrow against existing positions without forfeiting trading fee income.

India is among the fastest-growing markets for crypto adoption globally, a trajectory documented in TRM Labs' 2025 research. That growth unfolds against a backdrop of regulatory friction. The Reserve Bank of India continues to oppose the domestic use of foreign stablecoins and has expressed a preference for its own e-rupee CBDC, and no guidance has been issued on the tax or regulatory treatment of yield-bearing DeFi positions specifically. India's virtual digital asset tax regime applies a flat 30% capital gains rate and a 1% tax deducted at source on transfers, which compresses net yields substantially. A 33% gross APY may deliver considerably less after tax obligations are settled.

In Africa, South Africa's February 2026 budget formalised crypto assets under its capital flow management framework, adding reporting obligations for residents holding foreign crypto. Penalties for non-compliance reach ZAR 1 million or the asset value, whichever is higher, and can include up to five years imprisonment. Nigeria presents a distinct regulatory landscape: the Investment and Securities Act 2025 recognised digital assets as securities, and the Central Bank of Nigeria subsequently relaxed restrictions on banks' engagement with the sector. For Nigerian participants, USD-denominated stablecoin yields carry particular appeal given the country's inflation history. Kenya's framework is also evolving; the VASP Act signed in October 2025 established a dual oversight structure under the Central Bank of Kenya and the Capital Markets Authority, with increasing know-your-customer obligations on on- and off-ramp services. For institutional participants across South Africa and Kenya, where regulators are increasingly attentive to documented risk controls, the absence of a named risk curator at Curve is worth monitoring.

What Comes Next

The Curve DAO must now identify who fills the market curator role for Llamalend v2 before significant new markets open. The Ethereum mainnet expansion and treasury growth strategy are most directly dependent on a functional risk oversight layer being in place. CRV, the protocol's governance token, was trading near $0.25 as of mid-June 2026, the most recent confirmed data point available at the time of writing, placing the token roughly 91% below its all-time high and approximately 30.78% below its level at the start of 2026. Any yield paid in CRV therefore carries meaningful token value risk on top of standard smart contract and liquidity exposure.