Curve Finance Tokenomics

Adding a link to Curve Finance tokenomics as an example for others and I really like the first very clear paragraph:

"The main purposes of the Curve DAO token are to incentivise liquidity providers on the Curve Finance platform as well as getting as many users involved as possible in the governance of the protocol. "

Folks who know more please add to discussion about what they do and do not like about Curve and/or how it might apply to USF, but this post is mostly an example quick-reference.

The CRV Matrix is interesting:


One thing Curve did that was revolutionary in the DAO/DeFi space was issue emissions of 300 years. They are building for their future, their kids, grandkids, etc. They made a conscious decision to use the CRV token as the main mechanism for rewarding liquidity and Curve is now ubiquitous across all of DeFi. Their tokenomics have helped bolster resilient protocol through all market cycles (in all likelihood) and Curve has become the most important protocol in DeFi, if not all of public blockchain.

Taking this sustainable approach and a way to bring users on when they need it, rather than letting the earliest investors front run the market. Initially, the Medium post says there’s a 10 year emission of 86m USF tokens. It may be worth extending this by 3-5x since DeFi is just getting started and USF needs to build a protocol that will scale with the ecosystem.

From a protocol perspective that’s great as you have lots of ammo for many years. We need to incentivize people to park capital in the buckets for a looong time. For sure. BUT Curve tokenomics also killed investors and overall trading sentiment for the $CRV token. The ongoing sell pressure due to Tokens getting dumped in the market was and still is overwhelming. … CRV was a success dapp prior to the CRV token launch which is why this model was great for them. USF dapp is far from the success of Curve. We cannot allowed to have ongoing major sell pressure from early on. Traders/Investor/Influencers will not like to see a market that is on a heavy downtrend due to their tokenomics. …

Yes its good to think long-term incentives but you cannot just copy their model and expect it to work perfectly for us. More balance is required in order to protect the investors. We need them because they are part of spreading the word of the protocol. I’m not saying let’s make policies to pump the market and please let’s not make policies to dump the market either. I’m sure we can find balance.


High Level CRV tokenomics:

  1. (2) main purposes - incentivize liquidity providers (LP) and governance.

  2. (3) utility functions - staking, boosting, voting

  3. STAKING “receive trading fees from the Curve protocol” ($USF can do this)

  4. BOOSTING - “boost your rewards on provided liquidity. Vote locking CRV allows you to acquire voting power to participate in the DAO and earn a boost of up to 2.5x on the liquidity you are providing on Curve.”

This reads, to me, like your LP rewards are tied to how much (or maybe how long) you lock your CRV?

  1. VOTING - Once CRV holders vote-lock their veCRV, they can start voting on various DAO proposals and pool parameters.

NOTE1 - veCRV stands for vote-escrowed CRV, it is simply CRV locked for a period of time. The longer you lock CRV for, the more veCRV you receive.

NOTE2 - CRV officially launched on the 13th of August 2020.