Controversial Curve Funding Proposal Wins Over Tokenholders

The proposal previously attracted pushback from Curve’s community.

Curve community is no longer pushing back against a governance proposal to earmark 44% of the Curve Community Fund to fund the project’s development team for one year.

On Aug. 28, veCRV holders began voting on the proposal, which would provide 21 million CRV to Swiss Stake AG, the company tasked with overseeing Curve’s development, to fund its operations for 12 months. A significant portion of the funds would also fund third-party code audits and security research.

More than 99.9% of votes have been cast in favor of the proposal so far. The number of votes cast is fast approaching the 30% of circulating CRV required for quorum, with 28.5% mobilized so far. Voting is scheduled to close on Sept. 3, 2024.

Updated proposal

The support shown by veCRV holders comes in spite of the proposal initially attracting pushback on Curve’s governance forum. Critics opposed handing over 44% of the Curve Community Fund to fund a single year of Swiss Stake’s operations, took exception with the lack of a detailed costings analysis or development roadmap, and decried a clause allowing the company to staked CRV using third-party token wrappers.

On Aug. 22, Michael Egorov, the founder of Curve Finance, updated the proposal to include clear development objectives in a bid to assuage community concerns. “We take your feedback seriously and have addressed the most critical concerns raised by the community in this update,” Egorov said.

The update clarified that Swiss Stake will develop new protocol features including staking for its crvUSD stablecoin, two-way lending markets, support for new collateral assets including Cuve LP tokens, “multi-market semi-isolated lending,” cross-chain DAO functionality, and a revamped user interface.

“We understand the importance of developing a sustainable business model that minimizes or ideally eliminates the need for future grant requests,” Egorov said. “Over the next 12 months, we will be actively working on this and will keep the community informed of our progress… We acknowledge that continued funding is not guaranteed.”

The update also reaffirmed that unused funds will be rolled over to support development after the initial 12 months.

Stake DAO, a liquid staking protocol, is the largest veCRV holder to have voted, pledging 113.6 million of the 243 million veCRV tokens mobilized in support of the proposal.

Liquidation controversy

The proposal notably comes less than three months after Egorov suffered an enormous CRV liquidation. Egorov previously took out approximately $95 million worth of stablecoin loans collateralized by 371 million CRV — estimated to have been worth $141 million when Egorov entered the position.

The massive liquidation drew criticism, with onlookers arguing the loans served as a vehicle for Egorov to cash out without selling his tokens on the open market. On-chain data indicated that Egorov transferred $31 million in borrowed USDT to the Bitfinex centralized exchange in April 2023.

In May 2023, the Australian Financial Review reported that Egorov’s wife purchased a $41 million mansion in Melbourne, Australia, with the property located next door to a home the Egorovs purchased for $18.25 million one year earlier.

The price of CRV is down 3.6% in the past 24 hours, according to CoinGecko.