The decentralized cryptocurrency trading protocol Curve recently launched a new decentralized stablecoin, Savings crvUSD (scrvUSD), and proposed a change to its revenue model. The proposal aims to allow 10% of the fee income generated from crvUSD borrowing to flow into the scrvUSD Yearn vault, enabling scrvUSD holders to earn ongoing returns.
The proposal entered the voting process on November 3, and by the deadline, it had received approximately 92% support. The voting will conclude on November 9.
According to information on GitHub, scrvUSD represents users’ crvUSD deposits, allowing depositors to earn returns from the fees generated by the crvUSD controller. Curve’s governance page indicates that the controller serves as an on-chain interface for creating loans and managing existing positions.
Curve founder Michael Egorov stated that the proposal aims to drive the growth of the crvUSD stablecoin, which currently has a market value of $60 million. He explained on social media platform X last week how the proposal would lower the borrowing rate for crvUSD, making borrowing costs cheaper and helping to increase the supply of crvUSD.
In theory, if the proposal is passed and the scale of crvUSD indeed expands, the protocol will generate more revenue for governance members in the long term, although not in the short term. Curve community member crv.mktcap.eth mentioned that this proposal would be disadvantageous for veCRV holders in the short term (veCRV represents the locked token of Curve’s governance token CRV).
crv.mktcap.eth explained that the protocol currently distributes all interest rate fees from crvUSD to veCRV holders. If the new proposal is accepted by Curve’s governance body, 10% of the borrowing fees will flow into the scrvUSD vault, meaning veCRV holders “must give up some income to pay for this savings rate.” However, crv.mktcap.eth believes that the ultimate goal of increasing the stablecoin supply will cumulatively result in more absolute income for veCRV holders in the long term.
According to CoinMarketCap data, the price of CRV has fallen by 9.7% over the past month and was trading at $0.2315 at the time of writing.
