Curve (CRV) טוקנומיקה

The Curve DAO Token (CRV) is the native governance and utility token of the Curve Finance protocol, an automated market maker (AMM) specialized in stablecoin and volatile asset trading. Launched on August 13, 2020, the token is central to the protocol's decentralized autonomous organization (DAO) and its unique "vote-escrow" (ve) economic model.

Issuance Mechanism

CRV was launched as an ERC-20 token on the Ethereum mainnet with a maximum supply of approximately 3.03 billion tokens. The issuance is controlled by a decentralized mechanism involving several smart contracts:

• Minter and Gauge Controller: The minting of new CRV tokens is managed by the Token Minter contract, which is controlled by the Gauge Controller.
• DAO Governance Control: The Gauge Controller is itself governed by the Curve DAO through the Voting Ownership smart contract. This means that any changes to the emission rates or the addition of new gauges (which direct emissions to specific liquidity pools) must pass through a successful DAO vote.
• Cross-chain Issuance: While CRV can be bridged to multiple networks (such as Arbitrum and BNB Chain), the core governance functions, including locking CRV for veCRV and voting on emissions, must be conducted on the Ethereum blockchain.

Allocation Mechanism

The initial allocation of the 3.03 billion maximum supply was divided among several key stakeholder groups. Approximately 30% of the maximum supply was allocated to shareholders, which includes the founding team and early investors.

As of late 2023, the total supply in circulation was approximately 2.02 billion tokens. The distribution remains concentrated, with the top 10 wallet addresses holding roughly 72.32% of the total supply.

Usage and Incentive Mechanism

The CRV token serves three primary functions designed to align the interests of liquidity providers (LPs) and long-term holders:

• Governance: CRV holders can participate in the decision-making process of the protocol, including voting on pool parameters, adding new pools, and directing CRV emissions to specific liquidity gauges.
• Staking for Protocol Fees: By locking CRV, users receive veCRV (vote-escrowed CRV). Holders of veCRV are entitled to a portion of the protocol's trading fees. Currently, 50% of all trading fees generated by the protocol are distributed to veCRV holders in the form of 3CRV (the LP token for the TriPool, consisting of DAI, USDC, and USDT).
• Liquidity Boosting: LPs who also hold veCRV can "boost" their CRV rewards on the liquidity they provide. This mechanism allows users to earn up to 2.5x the base reward rate, incentivizing LPs to become long-term stakeholders in the protocol.

Locking Mechanism (veCRV)

Curve pioneered the vote-escrow (ve) model to encourage long-term commitment. To gain voting power and earn protocol fees, users must lock their CRV tokens in the VotingEscrow contract.

• Time-Weighted Voting: Voting power is proportional to the amount of CRV locked and the duration for which it is locked. The formula for voting weight is $w = a \times \frac{t_l}{t_{max}}$, where $a$ is the amount, $t_l$ is the remaining lock time, and $t_{max}$ is 4 years.
• Lock Duration: Users can choose a lock time ranging from a minimum of one week to a maximum of four years.
• Weight Decay: The voting power (veCRV balance) of a locked position linearly decreases as the remaining lock time approaches zero. To maintain maximum voting power and rewards, users must periodically extend their lock duration.
• Irreversibility: Once tokens are locked, they cannot be moved or traded until the lock period expires. This ensures that those influencing the protocol's direction have a long-term vested interest.

Unlocking Time and Vesting

The tokens allocated to the team, investors, and employees were subject to specific vesting schedules to ensure gradual market entry:

• Investors: Tokens were subject to a linear two-year vesting schedule that began on August 13, 2020.
• Employees: Tokens were subject to a linear two-year vesting schedule starting August 13, 2020.
• Core Team: Tokens are subject to a linear four-year vesting schedule that began on August 13, 2020.
• Community Grants: The DAO also operates a grant program, introduced in December 2020, which uses CRV tokens to fund independent teams contributing to the ecosystem.

As of late 2022, data indicated that approximately 53.8% of the circulating CRV supply was locked in the ve-system, with an average lock duration of 3.56 years, highlighting a high level of long-term commitment from the community.