Curve Finance's soft liquidation mechanism allows hundreds of loans to remain in liquidation for weeks.

ChainCatcher report, according to CoinDesk, Curve Finance’s data shows that its lending market has recorded 704 "soft liquidation" events involving 602 borrower addresses, with a median duration of 14.5 days, a quarter lasting at least 38.9 days, and some positions remaining in the liquidation range for months. Of these soft liquidations, 476 began in the first half of 2026. Unlike traditional lending protocols such as Aave and Compound, Curve’s LLAMMA system does not sell collateral in a single transaction once the price falls below a threshold; instead, it gradually converts collateral into the borrowed asset within a price range. If the price rebounds before the loan fully fails, some or all of the conversion can be reversed. This means borrowers are not in a grace period—part of their collateral has already been liquidated during the loan’s term—but they still have the opportunity to recover their position if prices reverse. However, soft liquidations are not without cost. Data shows that borrowers may still incur losses due to transaction fees, conversions, rebalancing, interest, and bidirectional price volatility; if market conditions remain unfavorable, positions can still fall into hard liquidation. Curve Finance is a leading DeFi protocol focused on stablecoin swaps and crvUSD lending, currently holding approximately $1.35 billion in deposits, with a DEX trading volume of about $3.4 billion over the past 30 days and around $46 million in active loans.