Distributing to veCRV makes a lot of sense. However it’s a much harder thing to do. Need to think how to do it technically
3 Likes
While I understand the appeal of distributing fees only to veCRV holders, I think the folks participating in governance are discounting the risk of looking like they are running a fiefdom to profit only themselves.
Between this and the 100% trading fee to admin fee proposal, as an outsider to the project (other than wanting to participate in some form of decentralized governance for learning and a small bag), it certainly looks to me like the #1 priority of VeCRV holders is to profit VeCRV holders.
I think buy and burn benefits ALL Crv holders, looks and feels more “democratic” and “decentralized”, and while the benefit that any specific CRV holder feels might be marginal, optically it’s night and day.
It’s saying to non governing CRV holders that they are also important. As someone who may or may not participate longer term in CRV governance depending on how “fair” vs self-enriching it appears to be, this is important to me as well.
Imagine the outrage if you owned shares in a public company, a new management team came in and the first thing they wanted to do was increase their own salaries. Even if this isn’t exactly analogous (I understand there is a desire to incentivize governance participation here), that’s what it looks like to an outsider like me.
Strong preference for buy and burn, at least for now.
I also like this idea of a community fund warchest for grants, R&D, and stuff like that. This both looks good optically and will probably go a long way towards actually improving the product which is a win for everyone.
4 Likes
The way I see it is that veCRV is the governance token and CRV is the token that has the potential to be a governance token via time-locking. This has a considerable opportunity cost, though an effective one to align long term interests of governance stakeholders. IMO only governance stakeholders that bear this opportunity cost should be rewarded. Otherwise non-staked CRV holders would be freeloading.
6 Likes
I am concerned about the latest trend as well. The gist of it is to turn a profit at the expense of the LPs and traders. This does not make much sense to me. Participating in governance is already a reward in itself, for the stakeholders are looking out for their own long term interest. Why would we want to add fees and extract money from the pools to reward ourselves for looking after our own interest? The traders will simply look elsewhere. Isn’t the whole point of the smart contract is to eliminate greedy bankers and middlemen, to be as efficient as possible? Now we have a governing body that wants a cut out of every slice of the pie. It doesn’t seem right to me. CRV was supposed to have 0 value. At $3.5, we are already infinitely more profitable. I think we should look to maintain that.
1 Like
I think it can be done in a way that avoids increasing swap fees, and returns value to LPs in a way that incentivizes participation in the governance.
Say, fee redistribution takes a small percentage of pool fees earned, and distributes to veCRV holders. This will slightly reduce the yield LPs earn, but if those LPs are also veCRV holders, they earn back an average of all fees earned across every Curve pool + additional fees based on all liquidity that is NOT participating in governance. It could be thought of as a tax on LPs who farm and dump for quick profit (who do not have a long term vested interest in the success of Curve), and further prioritizing those with a vested interest in the governance.
Plus it further aligns veCRV holders with the success of Curve because they are rewarded based on the real economic activity going on, instead of just getting more CRV (It’s unclear at this point why someone would want CRV unless they want more CRV… someone might mistake that model for a ponzi scheme). Basically, trading volume goes up, stakeholders earn more. That’s good, honest value for a good, honest service.
Right now, the only stakeholders in governance are LPs who want to increase CRV rewards, but a fee distribution to veCRV holders could create a separate class of stakeholders who are not LP’s, but are also incentivized to maximize the economic activity on Curve. This stakeholder might be incentivized to buy CRV to earn veCRV fees, instead of minting CRV as an LP. This wider set of stakeholders could be a double edged sword, since it may result in a conflict between classes of stakeholders on how the app should evolve, but I think the potential diversity of opinion is interesting and ultimately I think both groups would have the end goal of maximizing fees that Curve earns.
TL;DR I’m for the fee distribution to veCRV holders
3 Likes
Fee distribution could be coupled to the multiplier for providing liquidity. If you do both you should be rewarded most as you also take the most risk.
Blockchain and smart contracts’ whole point is to be permissionless. there’s nothing against applying fees.
I dont think anyone ever said the crv value should be 0?
Also one of the main ethos of blockchain/crypto is that things move forward because there is an incentive. you create incentives and people join and add value. thus this is the incentive to continue to lock crv and participate in running the platform.
There’s ZERO incentive for me to continue to lock more than whats needed for farming if it was just burning. in fact the incentive would be to let other people govern while i hold/sell/uniswapLP vanilla crv with support from buy-and-burn.
Thus i see there being a debate on how MUCH fees should be applied to keep it incentivized but also be low enough to support good volume etc. However the burn vs distribution, in my mind, shouldn’t even be a discussion. With long locks and a need to incentivize, distributing fees is the only way.
5 Likes
I support this view. There is no need to have more CRV if it has no intrinsic value. CRV will bleed out. Yearn’s sell pressure is massive, especially if #3 goes through.
There needs to be a reason to have CRV (apart from getting more CRV) otherwise everyone will just farm 'n dump. Moderate admin fees will provide a fundamental bottom to CRV price through the dividend achieved by staking/locking it.
3 Likes
There are a few considerations, but I think the veCRV distributions make the most sense. The downside with veCRV distributions is that these are probably taxable events depending on your jurisdiction. The upside is that it encourages locking CRV to veCRV, and thus indirectly boosts the price of CRV by limiting supply. So, even if boosting the price of CRV is your primary goal, veCRV distributions will help. veCRV distributions are also good because they incentivize locking of CRV even beyond the minimum that will get you to a 2.5x boost. Furthermore, as your veCRV decreases with time, your boost doesn’t change (unless you trigger a checkpoint). So absent veCRV rewards, there isn’t much incentive now to extend the lock of your veCRV or to lock more CRV as veCRV. With distributions, this changes.
Simply buying and burning CRV will more directly boost the price of CRV and avoid taxable events. However if you take a longer term perspective, what is best for Curve.Fi is having tokens locked and people participating in the governance. Currently, people are selling their CRV beyond what is needed to get the 2.5x boost, or using that extra CRV to farm on cream.finance, etc. It would be much better for Curve.fi for this to be locked as veCRV. Whichever option is selected will have a big effect on user behavior, so we should select the option that will incentivize the most good behavior. In this case, that is distributions to veCRV holders.
5 Likes
What if you do both? Doing so will satisfy both camps and help grow the CRV project in the short and long term.
I think good things aren’t choices, you have to do everything.
1 Like
Why APY is Soo higher it’s not good for project… because of higher APY daily Reward owner sell the Yield earnings and price of token is continuously going down… I think team need to a fork and fixed it… and team must provide public Roadmap of Curve… I just read some text in price discussion group someone buy 12000$ CRV at 11$ and now those person is very disappointed by team… I think team should do something for price and provide us a roadmap… Community is wealth of a project and community faith is very important… provide Public roadmap please… I am agree with Buy and Burn
1 Like
If Curve team announcement that they will start buy and burn than I think daily inflation will hold CRV and price will be stable and if not done this on right time than price will be under 1$ within cupple of day’s
With the price declining every minute, Buy and Burn is the only option. Wondering why they have inflation lol. Fixed supply would have been better.
2 Likes