Projects to add native token rewards to existing gauges
Curve Finance, a decentralized exchange (DEX), DeFi’s third-largest protocol with $6B in its smart contracts, has completed a governance vote to allow each project to add tokenized rewards to its factory deployed meters.
This means that projects looking to incentivize Curve liquidity pools with their native tokens can now do so directly with Curve, rather than forcing users to stake their Liquidity Provider (LP) tokens through another website to earn rewards .
Previously, projects had to be approved by the curve governance, which is governed by veCRV holders, in order to add their tokens to gauges as rewards. Users can get veCRV by locking Curve’s native CRV tokens.
Reduced friction
In general, the proposal will save projects time, wrote skeller0r, a member of the Curve team, on the protocol’s governance forum. Projects either had to go through rewards governance, which can be a lengthy process, or write their own staking contract to add rewards separately. A custom staking contract also requires users to take the extra step of staking their LP tokens elsewhere.
Gauges are reward mechanisms that allow a pool to receive rewards from CRV, Curve’s native token, as well as tokens from other projects. The assignment of CRV to the various meters is dictated by veCRV holders through a weekly vote.
A factory pool is a user-generated token pool. Creating a factory pool and meter is permissionless, but to challenge the meter for a share of CRV rewards still requires a governance vote, according to Curve documentation.
Existing measuring devices
So today’s vote just means that projects are free to pin their rewards to existing approved gauges.
Convex Finance, which allows users to deposit their CRV tokens to receive further increased CRV rewards, was the biggest yes voter for the proposal. StakeDAO, which curates revenue-boosting strategies for crypto, was the biggest “no” vote.
With daily volume fluctuating between $25 million and $224 million over the past month, according to The Defiant Terminal, Curve is the second largest DEX in DeFi.
Curve Dex trading volume, Source: The Defiant Terminal
TVL up, CRV down
Curve CRV Token has lost just over 28% in the last month. Over the same period, its peers have shown more resilience – Uniswap’s UNI is down 10% for the month and PankcakeSwap’s CAKE, which is powered by Binance Smart Chain, is actually up just over 2.3%.
CRV Prize + UNI Prize + CAKE Prize, Source: The Defiant Terminal
However, Curve has outperformed TVL, gaining 5% over the past month while Uniswap is down 10%.
Curve TVL + Uniswap TVL, Source: The Defiant Terminal
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