Curve's Soft Liquidation Model Lets Borrowers Survive Market Drawdowns

Curve Finance's lending system has been allowing borrowers to survive market drawdowns through its unique soft liquidation model. According to data, hundreds of crypto loans on Curve have crossed into liquidation and stayed there for weeks without being closed out.

The median duration of these soft liquidations lasted 14.5 days, with some positions sitting inside the liquidation range for months. Of those cases, 476 began during the first half of 2026.

Unlike traditional lending platforms where a single point triggers a sale, Curve's system uses a range to gradually convert collateral into the asset borrowed when its price falls through it. If prices recover before the loan fails completely, some or all of that conversion can reverse.