CRV vote locking on the Curve DAO produces veCRV (voting escrow CRV) which allows voting on proposals and can boost ROI up to 2.5x. But vote locking presents opportunity cost as well as smart contract risk. As a result, vote lockers (veCRV holders) have proposed an admin fee to balance compensation.
According to the abstract, “Curve has the option to introduce an admin fee of up to 50% of the trading fee.” This fee will flow from Curve transactions directly to the holders of veCRV. There is already a 0.02%…
The recent boom in Defi activity has been very taxing on the Ethereum network. But even with increasing costs, people expect to earn huge profits on protocols like Curve Finance.
No doubt many other protocols are hot right now, including the Yearn Finance governance token (YFI), but the Curve governance token was only just released so we are still discovering it’s true value.
If one chooses to vote-lock their CRV, they may receive a huge boost to their ROI — some pools over 200%. But what amount of CRV do you need to lock in order to receive such yields?
Yield Farmers may flock to the opportunity to earn 2.5x on already high APY through Curve Finance once vote locking is implemented on August 28th.
Until now, CRV has experienced heavy selling pressure as Farmers take profits and reinvest. Although Curve has high liquidity like other ecosystems, it’s token has not seen the same price appreciation. With vote locking implemented, there will soon be incentive to hold or buy CRV.