August 18, 2022: Terrible Twos ✌️📈

What to expect from Curve's recent inflation reduction

Curve Finance @CurveFinance

Curve DAO and $CRV turns 2 years NOW! What a ride! As usually on Aug 14th, CRV emissions just got reduced by 15%, and we are into a new epoch

Curve turning two is a big deal. Emissions tapering off by ~15% for just the second time in Curve history.

If you query the .rate() function on the Curve contract, you’ll now get a value of 6161965695807970181, whereas last week the number was 7327853447857530670. To be precise, this is a 15.91035847462854% reduction. Why such an unusual number?

It is derived from the formula 2 ** (1/4).

This specifically has the property of turning into 50% over exactly four years. We can observe this benchmark to the nearest Wei in the recent rate cut:

In other words, every four years, the emissions rate of $CRV is cut exactly in half. Does this remind you of anything? It’s explicitly designed to be a smoother version of Bitcoin’s clunky emissions reduction schedule.

Curve Finance @CurveFinance

@kcryptojunkie @crypto_condom Emissions mimick Bitcoin emission schedule

In other words, the Curve schedule will play out very similarly to Bitcoin. But thanks to this smoother formula it will end up being emitted for over 350 years, although practically speaking it will dry up much faster.

This great thread spells it all out:

Saint Rat Wrongtail 🇺🇦 (saintrat.eth) @saint_rat

4/6 The following numbers and years are the last time we have yearly emissions above that number: 100,000,000: Year 6 10,000,000: Year 20 1,000,000: Year 33 100,000: Year 46 10,000: Year 60 1,000: Year 73 100: Year 86 10: Year 99 1: Year 113

Another good thread:

Diligent Deer @diligentdeer

People often speculate when considering the emission schedule for $CRV. Let's end it. 🔹No, the $CRV emissions don't end in 2026 🔹It will take almost 112 years from now for the emission value to get below 1 $CRV per year. How am I so sure? ⏬ Thread 🧵 0/

What does this mean practically? We’re not generally fans of price analysis (nor is this financial advice), but let’s look briefly at Bitcoin to draw parallels.