Curve Outsourced Its Savings Vault to Yearn, and It Worked
Curve Finance, the decentralized exchange protocol managing roughly $2.5 billion in total value locked, made a decision that runs counter to how most software organizations operate. When the protocol needed a savings vault for its native stablecoin crvUSD, it chose to deploy an unmodified instance of Yearn Finance's V3 vault rather than writing custom vault code from scratch.
The result is scrvUSD, short for Savings crvUSD, an ERC-4626 compliant yield-bearing token that automatically accrues interest from borrower fees. Yearn highlighted the partnership on February 13, noting that Curve chose its vault architecture over the default path of building internally. The announcement underscores a shift in how DeFi protocols think about infrastructure: the best code is sometimes code you didn't write.
Why a $2.5 Billion Protocol Didn't Build Its Own Vault
The conventional wisdom in crypto is that major protocols build everything themselves. Curve has the engineering talent and the treasury to develop custom vault infrastructure. The fact that it chose not to reveals something about the maturity of DeFi tooling.
Yearn's V3 vault system, built on the VaultV3.vy contract (version 3.0.4), is an ERC-4626 compliant framework that handles deposits, withdrawals, strategy management, and profit reporting. By using an unmodified Yearn vault instance, Curve inherited years of battle-tested code, multiple security audits from ChainSecurity, Statemind, and Peckshield, and a standardized interface that any DeFi protocol can integrate with.
The alternative would have been months of custom development, its own audit cycle, and a codebase that only Curve's team would maintain. In traditional software, this is called the "build vs. buy" decision. In DeFi, it's becoming the "build vs. compose" decision, and composition is winning.
This pattern is not unique to Curve. Yearn's V3 architecture was designed to be modular and embeddable. Upcoming integrations with protocols like Katana, Term Labs, and Truemarkets suggest that Yearn is deliberately positioning itself as DeFi's vault infrastructure layer, not just a user-facing yield aggregator.
How scrvUSD Actually Generates Yield
The mechanics of scrvUSD are elegant in their simplicity. Users deposit crvUSD into the savings vault and receive scrvUSD tokens that appreciate in value over time. The yield comes from a single source: interest fees paid by crvUSD borrowers on Curve's LlamaLend platform.
Here's how the flow works:
- Borrowers mint crvUSD by depositing collateral into Curve's lending markets and paying interest on their loans
- FeeSplitter collects interest fees generated across all crvUSD controllers
- RewardsHandler calculates a dynamic weight based on how much of the total crvUSD supply is deposited in scrvUSD
- The Vault distributes rewards linearly to all depositors proportional to their share
The critical detail is that deposited crvUSD is not rehypothecated. The funds sit idle in the vault, earning yield purely from fee distribution rather than being deployed into external strategies. This is unusual for a Yearn vault, which typically runs active strategies across multiple protocols. For scrvUSD, the vault reports on itself, meaning the yield accrual is entirely internal.
The revenue share operates within DAO-governed bounds: a 5% minimum and 50% maximum of total crvUSD fees flow to scrvUSD holders. If 10% of circulating crvUSD is deposited into the savings vault, approximately 10% of generated fees reach those depositors.
The Numbers Behind the Savings Layer
crvUSD currently has a market capitalization of approximately $293 million with a circulating supply of around 293 million tokens, maintaining its peg near $1.00. As of early 2026, roughly 26% of crvUSD supply was deposited in the scrvUSD vault.
Curve's broader LlamaLend platform holds $228 million in TVL, with $146 million in active borrows and 1,202 active loans. The borrowing activity that funds scrvUSD yields has been growing: total borrowed rose 3.2% in the first week of January 2026, and crvUSD minted supply posted a 4.2% increase in the same period.
The yield on scrvUSD fluctuates with borrowing demand. During periods of heavy borrowing, yields climb. During quiet markets, they compress. This makes scrvUSD fundamentally different from fixed-rate savings products. It's a real-time reflection of Curve's lending market activity.
Yearn itself manages approximately $560 million in TVL across its vault ecosystem and generates roughly $200,000 in monthly revenue. The protocol operates on Ethereum, Arbitrum, Optimism, Base, Polygon, and Fantom, with scrvUSD available on Ethereum as well as cross-chain on Optimism, Base, Fraxtal, Fantom, BSC, and Avalanche.
What This Means for DeFi Users and Stablecoin Holders
For stablecoin users, scrvUSD represents a passive yield option that doesn't require active management. You deposit crvUSD, receive scrvUSD, and the token's value appreciates over time. No claim transactions, no compounding clicks, no strategy rotations.
The no-rehypothecation design is particularly relevant in the wake of DeFi exploits that have historically targeted complex strategy chains. When deposited funds sit idle and yield comes from fee distribution rather than external deployments, the attack surface shrinks significantly. The funds remain in the vault, audited by three independent firms, available for immediate redemption.
For users of self-custody crypto cards, scrvUSD creates an interesting dynamic. Holding a yield-bearing stablecoin in a self-custodial wallet means your spending power grows passively between transactions. Several card providers in the self-custody space, including Gnosis Pay and MetaMask, are building on Ethereum's DeFi stack where scrvUSD lives natively.
The broader implication is that stablecoins are splitting into two categories: those you spend and those that earn while you wait. crvUSD can be both, depending on whether you hold it raw or deposit it into the savings layer.
DeFi's Composability Thesis Gets Its Clearest Proof Point
The Curve-Yearn partnership is significant not because of any single metric, but because it validates the composability thesis that has defined DeFi since its inception. The idea that protocols should be like Lego blocks, snapping together to create products that no single team could build alone, has been more rhetoric than reality for much of crypto's history. Complex integrations break, oracle failures cascade, and composability often means compounding risk.
scrvUSD is the counter-example. A major protocol chose an external vault system, deployed it without modification, and it works. The vault has been live for months, handling deposits and redemptions, distributing yield, and maintaining its peg stability function for crvUSD.
This matters for the DeFi landscape because it signals that the infrastructure layer is maturing. Yearn is no longer just competing for retail yield-farming deposits. It's becoming the vault backend that other protocols embed, similar to how Stripe became the payments backend that other companies embed rather than building their own payment processing.
If this pattern accelerates, we could see a DeFi ecosystem where protocols specialize more aggressively: Curve handles AMM liquidity and stablecoin issuance, Yearn handles vault infrastructure, Chainlink handles oracles, and the user-facing products are assembled from these components. The protocols that build the best infrastructure primitives, not the flashiest user interfaces, may capture the most value long-term.
FAQ
What is scrvUSD? Savings crvUSD (scrvUSD) is a yield-bearing version of Curve's crvUSD stablecoin. Users deposit crvUSD into a Yearn V3 vault and receive scrvUSD tokens that automatically appreciate in value as borrower interest fees are distributed to depositors.
How does scrvUSD generate yield? Yield comes from interest fees paid by borrowers who mint crvUSD on Curve's LlamaLend platform. A FeeSplitter contract collects these fees and distributes them to scrvUSD holders based on a dynamic weight formula governed by the DAO, with a 5% minimum and 50% maximum revenue share.
Is scrvUSD safe? The vault contracts are audited by ChainSecurity, Statemind, and Peckshield. Deposited crvUSD is not rehypothecated, meaning funds sit idle in the vault rather than being deployed into external strategies. However, all DeFi protocols carry smart contract risk, and yields are variable rather than guaranteed.
Why did Curve use Yearn instead of building its own vault? Yearn's V3 vault system is battle-tested, ERC-4626 compliant, and already audited by multiple firms. By using an unmodified Yearn vault instance, Curve avoided months of custom development and inherited a standardized interface that integrates easily with the broader DeFi ecosystem.
What yield does scrvUSD offer? The yield fluctuates based on borrowing demand for crvUSD. It rises when borrowing activity increases and compresses during quieter periods. The rate is dynamic and reflects real-time lending market conditions on Curve.
Overview
Curve Finance's decision to use Yearn's V3 vault infrastructure for scrvUSD, rather than building custom code, is one of the clearest validations of DeFi composability to date. The savings stablecoin lets crvUSD holders earn passive yield from borrower interest fees without rehypothecation risk, using a vault system audited by three independent firms. With crvUSD's market cap near $293 million and growing borrowing activity on LlamaLend, the partnership demonstrates that the most valuable DeFi protocols may not be the ones with the most users, but the ones whose infrastructure other protocols choose to build on.
Recommended Reading
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