Understanding crv
The main purposes of the Curve DAO token are to incentivise liquidity providers on the Curve Finance platform as well as to involve as many users as possible in the governance of the protocol.
Currently, CRV has three main uses:
- Rewards
- Boosting
- Voting
These three functions will require users to vote-lock their CRV and acquire veCRV.
Info
veCRV stands for vote-escrowed CRV, representing CRV tokens locked for voting in the Curve DAO.
More information about Vote-Locking can be found here.
Rewards (Admin Fees)¶
CRV can be locked to receive trading fees from the Curve protocol. A community-led proposal introduced a 50% admin fee on all trading fees. These fees are collected and converted to 3CRV, which are then distributed to veCRV holders.
Boosting¶
One of the main incentives for locking CRV is the ability to boost rewards on provided liquidity. Vote-locking CRV allows users to acquire voting power to participate in the DAO and earn up to a 2.5x boost on the liquidity they provide on Curve.
Voting¶
Once CRV holders vote-lock their CRV, they can start voting on various DAO proposals and pool parameters.
The CRV Matrix¶
The table below can help you understand the value add of veCRV.
Liquidity in Pool & no veCRV | Liquidity in Pool & veCRV | Liquidity in Pool & Gauge & no veCRV | Liquidity in Pool & Gauge & veCRV | No Liquidity & no veCRV | No Liquidity & veCRV | |
|---|---|---|---|---|---|---|
Earns lending & trading fees | Yes | Yes | Yes | Yes | No | No |
Earns CRV Emissions | No | No | Yes | Yes | No | No |
Earns boosted CRV Emissions | No | No | No | Yes | No | No |
Can vote on DAO Proposals | No | Yes | No | Yes | No | Yes |
Can vote on Gauge Weight | No | Yes | No | Yes | No | Yes |
Earns Gov Fee | No | Yes | No | Yes | No | Yes |