Curve's LLAMMA System Turns Liquidations into Manageable Risk Cycles

Curve's lending platform has released data on its first-half 2026 performance, revealing that its Liquidation Management Algorithm (LLAMMA) system helped borrowers navigate liquidation risk cycles during a difficult period for DeFi lending.

Curve tracked 704 Soft Liquidation episodes involving 602 borrower addresses, with a median duration of 14.5 days and a 75th percentile of 38.9 days. This suggests that liquidations often became prolonged risk-management cycles rather than single events.

The data analyzed 12 high-value episodes representing $15.2 million in collateral exposure and found that LLAMMA progressively converted collateral while loans remained open, giving borrowers time to respond.

Curve argues that resilient liquidation systems must handle more than simple market volatility, citing infrastructure problems and liquidity shortages as key challenges. The platform stresses that the process is not lossless and does not guarantee avoidance of Hard Liquidation, but rather turns stress management into a process borrowers can actively navigate.