Curve Community Proposes Allocating 10 of crvUSD Revenue to scrvUSD Holders

Curve Community Proposes Allocating 10 of crvUSD Revenue to scrvUSD Holders

Curve Community Proposes Allocating 10 of crvUSD Revenue to scrvUSD Holders

The decentralized cryptocurrency trading protocol Curve recently launched a new decentralized stablecoin, Savings crvUSD (scrvUSD), and proposed a change to its revenue model. The proposal aims to allow 10% of the fees generated from crvUSD borrowing to flow into the scrvUSD Yearn vault, enabling scrvUSD holders to earn ongoing returns.

The proposal entered the voting process on November 3 and had received approximately 92% support by the deadline. Voting will conclude on November 9.

According to information on GitHub, scrvUSD represents users’ crvUSD deposits, allowing depositors to earn returns from fees generated by the crvUSD controller. Curve’s governance page indicates that the controller serves as an on-chain interface for creating loans and managing existing positions.

Curve founder Michael Egorov stated that the proposal aims to drive the growth of the crvUSD stablecoin, which currently has a market capitalization of $60 million. He explained on the social platform X last week how the proposal would reduce borrowing rates for crvUSD, making borrowing costs lower and helping to increase the supply of crvUSD.

In theory, if the proposal passes and the scale of crvUSD indeed expands, the protocol will generate more revenue for governance members in the long term, but not in the short term. A Curve community member, crv.mktcap.eth, indicated that the proposal would be detrimental to veCRV holders in the short term (veCRV represents the locked token of Curve’s governance token CRV).

Crv.mktcap.eth explained that the protocol currently distributes all interest rate fees from crvUSD to veCRV holders. If the new proposal is accepted by Curve’s governance body, 10% of the borrowing fees will flow into the scrvUSD vault, meaning veCRV holders “will have to forgo some income to pay for this savings rate.” However, crv.mktcap.eth believes that the ultimate goal of increasing the stablecoin supply will result in more absolute income for veCRV holders in the long term.

According to CoinMarketCap data, the CRV token price has fallen by 9.7% over the past month, with a trading price of $0.2315 at the time of writing.

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