CIP#28 - What token should admin fees be distributed to veCRV holders?

Summary:

Due to demand from community members, we have decided to revisit how trading fees should be distributed to veCRV holders. Governance originally voted for CRV.

Motivation:

Whilst buying and distributing CRV was positively received, some community members suggested a stable coin or an LP token made more sense to avoid volatility.

CRV implementation is the hardest due to front running concerns when buying on the open market.

Stablecoin option in the form of an LP token would have the benefit of compounding whilst unclaimed
Currently, around $756k of fees has been collected in 23 days with the veCRV holder APY standing at 75%

Please note if the stablecoin option wins, a secondary signal would be offered with multiple options (LP tokens and stable coins likely to be 3CRV/yCRV/USDC/DAI). You may suggest other options below.

Poll:

https://signal.curve.fi/#/curve/proposal/QmbjEcDnnkQK6arzsySurA698s8SvrXNvbDkyRAqZxNxmV

2 Likes

In my humble opinion the team should choose what’s easier and makes more sence , stable, btc, eth, I’m all for it, wise to avoid the frontrunners too , all I really want is for the contract to be up and running and paying/distributing asap so we can start collecting:)
Have that said I understand the delay as we have new products being added every other day and I like that even more lol
Cheers all

3 Likes

Could you please explain?

Frontrunning is OK because we have a chainlink oracle for CRV price and can use that. What’s harder than other distribution options is that there are many different coins in which the admin fee is collected - for compound pool it’s in cDAI, cUSDC, for different pools with yTokens, it’s that variant of yToken etc, so have to convert all of them, then buy CRV

3 Likes

Distributing CRV to veCRV holders is the best option in my opinion. The CRV inflation is quite heavy, this might help to improve this model slightly. veCRV holders are probably less likely to sell their CRV at these levels.

6 Likes

I’m glad this came back up. Would it be possible to have two options:

  1. I’d like my portion of admin fees paid in X (USDC, DAI, USDT)
  2. I’ll take my portion of admin fees as is

Maybe I’m wrong, but it seems to me that converting is going to add alot of complexity and gas to the contract, so I think if you choose option 1 you should get docked some to cover that (call it a convenience fee). Option 2 would be great for whales and dolphins, but might not be great for small vecrv holders though because given the number of pairs a trade can happen in, it might take a long time before it was worth it to claim each type of token they’d be accruing if gas prices go back up unless it can be put on layer2 or “claim all” doesn’t cost much more than a single token.

If doing both is too much, I’d opt for option 2 just to get something done sooner rather than later - knowing it can always be improved.

1 Like

In thinking more about this, I guess it would all happen at claiming anyway, right, so if you choose to receive in one token, the contract will have to iterate thru each bucket of tokens that have been collected, pull out your share, then convert that to your preferred token if necessary, and finally dump that accumulation of preferred token into your wallet. If you selected “as is”, no conversion would be necessary - it would just iterate the buckets, pull out your share, and dump those in your wallet. Is that correct - and I guess gas costs wouldn’t matter, because the person doing the claim would pay it so it would be fair either way. Is that about how it would/could work?

1 Like

I have yet to understand what the veCRV whales are thinking, but probably they will be pushing to receive LP tokens in their preferred pool. Receiving in any stablecoin is messy because everyone has their own preferred stable or LP token. One thing everyone here has in common is that we all wouldn’t mind receiving CRV. This revote is bullshit. We had a solution that is a good neutral solution all veCRV can be Reasonably satisfied with, and now it’s going to be a political shit show with a few whales advocating for one stablecoin over another

4 Likes

I favor the original plan of paying in CRV because I think the CRV token price could use the support, and it’s just so convenient to receive everything in one currency that we should all believe in or why are we here?

2 Likes

Charlie, could you break this down, so if say you had 1% of vecrv, what tokens/percentages the “as is” scenario would result in if you claimed. Then people can see how many different ones there would be and how many conversions would be necessary whether they want it in CRV, USDC, etc? I think that might help people understand the shear number of swaps involved during a claim to get just one coin.

Balancer pool token of CRV/wBTC/ETH/DAI/USDC/USDT or 3pool.

Fees are charged in kind and about 80% of trading volume is in USDT, USDC, and DAI.

So it seems like it would be a very natural and operationally simpler thing to pay out those fees in that same currency, rather than paying out in CRV or ETH or wBTC.

There could be an option presented to withdraw fees in the currency of your choice, for a fee.

1 Like

We are converting the assets first, so from user perspective gas costs don’t matter, it’s a normal claim

1 Like

If you convert first, that pretty much dictates choosing one coin and sticking to it, be it CRV or a stable, right? I assume the contract will only buy once the amount in each bucket reaches a threshold, but doesn’t that make the claiming code complicated, because technically you are entitled to your fraction in every bucket when you claim, but you can’t claim what hasn’t been bought yet - so the contract would have to keep track of that. The “as is” approach is problematic too - because all but the biggest vecrv holders would end up with probably dust like amounts for everything but the most traded buckets and the wrapped vs unwrapped pools mean you’d get a lot of different tokens but that might be ok if you are an LP - you can just reinvest periodically or swap if need be. Either way seems complicated - i feel for you guys implementing and testing. It may be perverse, but I do like the “as is” or stable coin because as alluring as it sounds to have the contract buy CRV, I think a lot of people will still just turn around and sell it. By giving vecrv stakers something other than CRV, it will give them something else to sell if they want to. If staking APY stays high, word will get out and people will buy CRV just to stake.

In my opinion admin fees should be distributed either in ETH or 3CRV.

Rationale: ETH is the “weapon of choice” for most Curve-finance users (or Defi users in general), it’s the core position for most, it’s something that we all use everyday and most of us keep accumulating.
3CRV will be (already is) the flagship pool for Curve, so makes sense too, we’ll be promoting our product while compounding rewards unclaimed.

Otherwise, the admin fees being distributed in CRV will most likely carry the frontrun problem… I understand the “buy back” logic, but in other hand, anyone receiving CRV rewards that just wants to farm it, would sell it anyways, so that forced buying pressure it’s not something organic. Price will eventually stabilise sooner or later, and it wont be because of Admins fees being used to buy CRV.

3Crv would be a great choice if you are in the 3pool already. Not all LPs are and some probably would rather not be. CRV is a good solution because it is the native token to this application. Whether people would be predisposed to sell it or hold it doesn’t matter so much. It is the one token every single veCRV user has in common. I mean, I guess ETH kind of is required, but a lot of people just keep it for gas, it really isn’t central to make Curve the thing that it is

This revote is really unfortunate. Any payout other than CRV is going to be politicized and will eventually be replaced by the DAOs next flavor of the week coin ad infinitum

PS to be clear, I’m not advocating for CRV because I want to pump my bags and think it’s better for the price. I think this is actually the ONLY viable option over a long term time horizon. CRV is literally the only coin we know for sure will last as long as Curve does.

1 Like

Whoever wants to sell CRV will sell CRV, so the only thing that will happen (if admin fees are used to buyback CRV) is more CRV volume down and forward. If you think that will support the price, its a false hope. Price discovery is still going on, price needs to stabilise and it will, and it better be organically because the market finally found “fair value” for Curve marketcap, project prospects, etc…

Other thing is, one can believe, admire and support the Curve project and not necessarily want to hold CRV… the best support Curve can receive from all of us, is us using their products, CRV token price is irrelevant in that matter (I know it’s relevant for our CRV Apy, but it’s not relevant per si, it’s a bonus)

Though, we will be earning some CRV/ETH after CIP#18, and CRV markets will be more liquid.

In the end it doesnt really matter. Everyone wants something different so people will have to convert anyway.

  • stable coin LP: majority of people are interested in this (assumption) so maybe 3pool. Bonus: LP tokens continue to get fees while waiting to claim

  • Crv: the platform native token thus it makes sense from a systematic point of view I guess? so its probably the “most neutral”. although liquidity isnt that great so bit of a negative there. Also I do not think this is a price supporting move from the buy back.

Either option works so I assume it will be Stable LP since thats probably what majority wants in the end.

Ill most likely be converting to eth/btc myself so ill take a swap hit no matter which way. lol

Point is, wouldnt worry if its A or B. Just vote for what you personally want.

1 Like

Bravo! I commend the Curve community for taking the right step forward! LP token distribution is the efficient and decentralized way to distribute admin fees. I am excited to see where Curve will go next.