May 23, 2024: Buyback Program 🏦🤝
Ramifications of converting Curve fee distribution to $CRV
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A curious poll appeared on the Curve 𝕏 account this AM.
It started with a different conversation in the Curve social channel with some bellyaching about inflation
$CRV token inflation that is, not USD inflation. ALhough it got pointed out that inflation for $CRV is actually trending below USD inflation…
It segued into this conversation on the fee token.
So, back in 2020 it was effectively impossible to do this, as there wasn’t even much in the way of onchain liquidity for $CRV.
Nowadays, it might well be possible. Via crvhub.com, fees are around half a million each week.
Of course, this would be processed as a bunch of smaller transactions to burn fees from each pool into whichever the fee token.
But imagine a weekly green candle from a single $500K buy…
Then subsequently followed by a slightly smaller red candle.
So the poll may determine whether crvUSD or CRV. There’s a pretty good argument for $crvUSD — every such token on the market is earning the variable interest rate for veCRV holders. In the way that a lot of 3CRV became sticky (ie, users would just leave it parked idle even though it didn’t earn higher interest), it may be that it becomes a huge liquidity sink for $crvUSD.
Oh right… there’s also a 3CRV option, although this feels increasingly dated.
There’s also an argument for distributing as veCRV (veCRV of course not transferable, but mechanics would presumably look something like the claim of tokens also locks in the process) which would do a good job to keep it off the market, but may be unpopular. A second poll appears likely to follow.
We’d humbly suggest a tie goes to a superposition of the tokens… ie TriCRV LP.
