The price of cvrUSD, the decentralized finance (DeFi) protocol's stablecoin called Curve, has plunged as high as $0.991 over the past week. And since then it has failed to break above $0.995.

In this way, the stablecoin is showing greater difficulty in maintaining parity with the value of the dollar. This problem has been going on for five months when it stopped trading 1:1 with the US currency.

In an attempt to fix the price disparity, the Curve community is currently voting on a proposal to increase interest rates on loans on the Curve platform. This was published on 21 November.

The initiative proposes to increase the protocol's interest rate multiplier from 5.8% to 11% for loans collateralized in ether (ETH) and bitcoin (BTC) tokens and from 8.6% to 15% for those collateralized with staked ETH. In this way, it is estimated that cvrUSD would recover its price of $1.

Higher interest rates disincentivize users from borrowing cvrUSD excessively, which is crucial to prevent there from being too much supply of this coin in the market. When there is more cvrUSD available than users want or need, its price tends to fall below $1, leading to loss of parity. By making cvrUSD borrowing more expensive, fewer users are expected to borrow and those who have already done so will be motivated to repay their loans more quickly. This reduces the total amount of cvrUSD in circulation, helping to stabilize its price at around $1.

So far, the proposal has received unanimous support for it to be carried out. However, it has received few votes and the decision is not yet closed. Voting will remain open until Nov. 28.