Curve Finance soft-liquidation mechanism keeps hundreds of loans active for weeks

Data from Curve Finance reveals that its lending market recorded 704 soft-liquidation events involving 602 borrower addresses, with a median duration of 14.5 days. Unlike traditional protocols like Aave or Compound, Curve's LLAMMA system gradually converts collateral into borrowed assets rather than executing a single liquidation. While this allows positions to recover if prices rebound, borrowers still face costs from trading fees, rebalancing, and price volatility, with the risk of hard liquidation if market conditions remain unfavorable.