Curve (CRV) טוקנומיקה

The Curve DAO Token (CRV) is the governance and utility token of the Curve Finance protocol, designed to incentivize liquidity provision and promote active participation in the protocol's decentralized autonomous organization (DAO). The tokenomics are centered around the vote-escrowed CRV (veCRV) mechanism, which aligns long-term commitment with governance power and rewards.

Issuance Mechanism

The CRV token, launched on August 12, 2020, is an ERC-20 token on Ethereum with a maximum token supply of approximately 3.03 billion CRV. As of September 27, 2023, the total token supply was approximately 2.02 billion CRV.

The minting of additional CRV is controlled by the Curve DAO through a specific smart contract architecture:

1. The Token Minter smart contract acts as the minter.
2. The Gauge Controller smart contract controls the Token Minter.
3. The Ownership Agent (admin of the Gauge Controller) is controlled by the Curve DAO via the Voting Ownership smart contract.

This structure ensures that any future CRV emissions are subject to a successful vote and execution by the Curve DAO.

Allocation Mechanism and Vesting

The initial allocation of the maximum token supply was distributed across several groups, with specific vesting schedules designed to manage the circulating supply and ensure long-term commitment from core participants.

Note: The remaining allocation is distributed to liquidity providers and the community fund.

Usage and Incentive Mechanism

The CRV token's utility is primarily realized through its vote-escrowed form, veCRV, which is obtained by locking CRV tokens. The core functions of CRV/veCRV are:

1. Governance (Voting)

• Participation: veCRV tokenholders govern the Curve DAO, utilizing the Aragon smart contract architecture. They vote on protocol parameters, CRV emissions, and application/protocol upgrades, including the onboarding of new collateral for the crvUSD stablecoin.
• Proposal Creation: Any user holding at least 2,500 veCRV can create an on-chain proposal.
• Voting Weight: The voting weight is time-weighted and proportional to both the amount of CRV locked and the duration of the lock. This mechanism replaces the standard one-token, one-vote system.

2. Staking (Fee Accrual)

• Protocol Fees: veCRV holders receive a portion of the protocol fees generated by Curve Finance.
• Distribution: A community proposal introduced a 50% administrative fee on all trading fees, which is distributed to veCRV holders. These fees are collected and used to purchase 3CRV (the LP token for the TriPool, consisting of USDC, DAI, and USDT), which is then distributed to veCRV holders. Fees are derived from trading, borrowing, and stabilization activities on the platform.

3. Boosting Liquidity Rewards

• Incentive: Liquidity providers (LPs) who lock CRV for veCRV can significantly boost their CRV rewards on the liquidity they contribute to Curve pools.
• Boost Multiplier: This mechanism allows LPs to earn up to 2.5 times the base amount of CRV rewards. This system is central to the "Curve Wars," where external protocols compete to accumulate CRV and veCRV to direct CRV emissions to their preferred liquidity pools.

Locking Mechanism (Vote-Escrow)

The Curve protocol utilizes a pioneering vote-escrow (ve) tokenomics model to incentivize long-term holding and participation.

• Locking Process: Users lock their ERC-20 CRV tokens in a VotingEscrow smart contract to receive veCRV. Only ERC-20 CRV on Ethereum can be locked for veCRV, although CRV is available on multiple networks.
• Lock Duration: The lock-up period is selectable by the user, with a minimum lock time of one week and a maximum lock time of four years.
• Time-Weighted Voting: The amount of veCRV received, and thus the user's voting power, is directly proportional to the amount of CRV locked and the length of the lock-up period. The voting weight gradually decreases as the lock expiry date approaches.
• Commitment: As of September 29, 2022, Curve DAO demonstrated strong long-term commitment, with 53.8% of the circulating CRV supply locked and an average lock duration of 3.56 years.

Unlocking Time

The unlocking time for CRV tokens depends on the specific allocation group and the user's chosen lock duration:

• Vested Allocations:
  • Core Team: Tokens were subject to a linear four-year vesting schedule starting on August 13, 2020.
  • Investors and Employees: Tokens were subject to a linear two-year vesting schedule starting on August 13, 2020.
• veCRV Unlocks:
  • For tokens locked by users to obtain veCRV, the tokens become available for withdrawal only after the user-selected lock-up period expires, which can be up to four years.

Information regarding specific, upcoming token unlock events for the Curve DAO Token was not available.