Curve Finance Proposes Yield Basis to Share Revenue with CRV Holders

TLDR

• Curve Finance has proposed Yield Basis to share revenue directly with CRV holders, offering a sustainable income model.
• The proposal aims to turn the CRV token into a yield-bearing asset, providing consistent returns to token holders.
• Curve Finance plans to mint $60 million worth of crvUSD and allocate funds across Bitcoin-focused liquidity pools.
• Between 35% and 65% of Yield Basis revenue will be distributed to veCRV holders, strengthening its DeFi position.
• The new model aims to reduce Curve Finance’s reliance on inflationary rewards and attract professional traders and institutions.

Curve Finance has introduced a new proposal to share revenue directly with CRV holders. The initiative, called Yield Basis, seeks to offer a sustainable income model. The proposal aims to transform the CRV token into a yield-bearing asset, providing consistent returns to holders. The Curve DAO governance forum is hosting voting for the proposal, which ends on September 24.

A New Model for CRV Rewards

Yield Basis will distribute income directly to CRV holders who lock their tokens for veCRV governance rights. This system contrasts with previous incentive programs that relied heavily on airdrops and emissions. Under the new model, Curve Finance will channel income from Bitcoin-focused liquidity pools back to token holders.

aCurve will mint $60 million worth of crvUSD, its over-collateralized stablecoin, to fund the proposal. The funds will be allocated across three Bitcoin-focused pools: WBTC, cbBTC, and tBTC. Each of these pools will have a cap of $10 million, contributing to the overall distribution of Yield Basis tokens.

Potential Impact on Curve Finance

If the proposal is approved, CRV holders will benefit from more predictable and consistent returns. Between 35% and 65% of Yield Basis’s revenue will go to veCRV holders. Additionally, 25% of the Yield Basis tokens will be reserved for the Curve ecosystem.

This new model could reduce Curve Finance’s reliance on inflationary rewards and boost its position in the decentralized finance (DeFi) space. The protocol aims to attract professional traders and institutions by offering yields without the risks of short-term losses typically seen in automated market makers. Curve Finance looks set to evolve its governance token into a more attractive income-generating asset.

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