Proposal to optimize scrvUSD parameters: increase fee share and reduce TWA window

Proposals
#1

Summary:

Adjust scrvUSD parameters to support sustainable growth: increase maximum fee share from 10% to 20% and reduce Time-Weighted Average (TWA) window from 7 days to 2 days.

Abstract:

This proposal optimizes two key parameters of the scrvUSD system:

  1. Increase the maximum fee share from 10% to 20%, enabling higher staking capacity and more competitive APY generation as the protocol scales
  2. Reduce the TWA (Time-Weighted-Average) window from 7 days to 2 days to accurately reflect staking demand during the initial growth phase, preventing artificial yield suppression from delayed yield adjustments

These changes aim to support sustainable growth of both crvUSD circulation and staking participation while maintaining attractive yields for participants.

Note: The minimum fee share will stay unchanged at 5% allocation.

Motivation:

The scrvUSD launch has demonstrated strong success. Circulating crvUSD supply has grown by approx. 4%, with approx. 6% of circulating supply staked from the demand of the current 16% yield. Two key optimizations will support continued growth:

  1. The current 7-day TWA window creates unnecessary delays in yield adjustments. When staking increases, the protocol waits a full week before requesting higher fee allocations, artificially suppressing yields for new deposits. A 2-day window allows yields to adjust quickly with staking levels, preventing unintended yield compression and dilution during growth phases.
  2. Given the successful launch, increasing the maximum fee share to 20% will enable further growth of crvUSD and scrvUSD while maintaining competitive yields at higher staking levels. This adjustment supports the broader goal of scaling crvUSD while ensuring the protocol remains attractive to liquidity providers.

These two key optimizations will help stabilize the crvUSD peg by creating demand for buying and depositng crvUSD into scrvUSD.

Specification:

Two contract calls will be made via agent (0x40907540d8a6C65c637785e8f8B742ae6b0b9968):

  1. Update TWA window to 2 days:

    • To: 0xE8d1E2531761406Af1615A6764B0d5fF52736F56
    • Function: set_twa_window
    • Input: 172800 (seconds)

  2. Update fee distribution:

    • To: 0x2dFd89449faff8a532790667baB21cF733C064f2
    • Function: set_receivers
    • Inputs: [(scrvUSD: 0xe8d1e2531761406af1615a6764b0d5ff52736f56, 2000 (20%)),
      (CurveDAO: 0xa2bcd1a4efbd04b63cd03f5aff2561106ebcce00, 8000 (80%))]

For:

A greater share of crvUSD fees flowing to scrvUSD should foster crvUSD growth, which in turn should:

  • Lower borrowing rates
  • Reduce Curve borrowing rate volatility
  • Generate long-term fee growth for veCRV holders

Against:

A larger share of crvUSD revenue flowing to scrvUSD means lower yield for veCRV holders in the short term.

Vote Links:

Curve Monitor
CRV Hub

5 Likes