Obviously yearn must reduce our dependency on CRV and it seems that v2 vaults will help us get there but in the mean time I was thinking about improvements to CRV and I think a big problem is medium term incentives.
CRV has short term incentives (deposit liquidity and immediately start earning fees and CRV) and long term incentives (lock CRV into veCRV (sure you can do it for a week but the average person is locking for 3+ years)). But what medium term choice is there other than selling the CRV you got from taking advantage of short term incentives? This would mainly be people who don’t want to lock into veCRV and probably don’t care about participating in governance.
So I think there should be another incentive structure where you can deposit CRV and earn a yield or boost (not sure how this should be structured - kind of wanted to avoid something that would result in even more CRV inflation) but it doesn’t kick in for a period of time and then slowly grows - you can withdraw at any time but you forfeit your progress. This has a lot in common with veCRV except crucially you can WD. I think the type of person who might do this would prefer to have that flexibility. I think also they don’t care about voting in governance.
Also, totally different topic but someone should create a product where you can lock in certain future CRV prices. I am not sure what platform would be good for this. Maybe Synthetix or UMA? I am a lawyer not a dev unfortunately so don’t have the technical background.
CRV is on https://app.cream.finance/. You could take your farmed CRV and lend it there, if you trust them. There’s also a proposal to add it as collateral on Aave, which is way more trustworthy imo. There’s also a Curve proposal to incentivize LPs on Uniswap, so you would be able to deposit your CRV/ETH and probably earn a good return that way. These options are all free to deposit and withdraw without locking.
Your post did get me thinking about other ways you might natively support a CRV boost to LPs without locking. The incentive to lock is to encourage participation in governance, but for people who dont care about voting, maybe it’s possible to delegate voting.
A vote delegation gauge would supply CRV inflation to a pool that would be available to pay out when a delegator wishes to withdraw. Say I’m an LP and I want boost but I dont want to lock, I choose an address that has veCRV to delegate to, and specify a timelock, which determines the amount of veCRV delegated to them. The amount of veCRV created won’t give me voting power or trade fees; it only affects my boost. The recipient of my delegation only receives trade fees and voting power; their boost is unchanged. Thus, all the features of veCRV are intact, but split between the two parties.
The vote delegation gauge will only accept delegation requests up to the amount of CRV inflation that has been assigned to the gauge. This is because the delegation process still technically time locks the CRV, and the LP should be able to withdraw at any time, and therefore always needs CRV sitting in the pool, ready to withdraw. This means if the Curve DAO doesn’t want to allocate inflation to vote delegation, or if it becomes really popular, LPs might not be able to successfully delegate.
That’s probably way overcomplicated, but I’m trying to juggle the primary reason for having the boost (get LPs incentivized to participate in governance) with the flexibility for the profit seeking LP to boost without the locking or the voting. Nice thought experiment anyways
A vote delegation system is always a great idea IMO. DOT and ADA (kinda) and also KNC have these in place.
Many people are too busy to stay up to date on the “best” or they are feeding their time to other protocols. Or they just don’t give a …
Not sure we need to convert curve to this system, but it’s certainly worth remembering for the FYI users that also don’t give a yearn.
In collaboration with Yearn, Curve has developed a pool factory, a way for anyone to deploy a Curve Metapool with the 3Pool or sBTC Pool.
More volume and more trading fees for the DAO.