Curve Governance Power Shift: 17 Million CRV Funding Proposal Rejected, Capital Parties Become the New Decision-Makers

null

Original author: CM (X:@cmdefi)

A few days ago, a grant proposal from Curve was rejected for the development team(Swiss Stake AG) 17M $CRV Both Convex and Yearn voted against the development funding, and this vote ratio was enough to affect the final result.

Since the Aave governance problem began to ferment, the governance has begun to be paid attention to by the market, and the inertia of giving money has also begun to be broken. There are two key points behind Curve’s proposal:

1. Some voices in the community are not opposed to granting funds to AG, but how to use the money before, how to use it in the future, whether it is sustainable, whether it brings benefits to the project, these things are what they want. At the same time, this overly primitive grant model leads to no constraints as long as the money goes out, and in the future, DAOs need to establish Treasury, and income and expenditure must be transparent, or governance constraints should be increased.

2. The big voters of veCRV do not want to dilute their value. This is a clear conflict of interest, and if the project supported by the CRV grant cannot foreseeably create benefits for veCRV, there is a high probability that it will not be supported. Of course, Convex and Yearn also have their own selfish intentions and powers, so let’s not talk about this aspect for now.

This proposal was initiated by Curve founder Mich, who is also one of the teams that have been maintaining the core codebase since 2020, and the roadmap given by AG for this grant roughly includes continuing to promote llamalend, including support for PTs and LPs, as well as the expansion of the on-chain foreign exchange market and crvUSD. Looks like it’s worth doing, but is it worth the 17M? $CRV This needs to be calculated separately, especially since Curve’s governance differs from Aave’s in many ways, and its power is distributed among several well-positioned teams.

Compare VE with the regular governance model:

Of course, if the DAO is mature enough, then the traditional structure can also run well, but unfortunately no project has matured to this level, such as Aave, the head of market consensus, will also have problems.

So if we talk about model design alone, VE has a certain advanced place, first of all, it has cash flow, behind it is liquidity control, when there is liquidity demand from the outside world, this power will be bribed, so even if you don’t want to lock up your position for a long time, then you can delegate your tokens to an agency project like Convex/Earn to obtain income.

Therefore, VE is a model that binds voting rights to cash flow, so the future evolution is likely to be the “governance capitalism” route, and VETOKEN binds voting rights to “long-term lock-up”, which is essentially screening those who have a large amount of funds, can withstand liquidity losses, and have the ability to play long-term games. In the long run, the result is that the ruler gradually changes from an ordinary user group to a “capital group”.

At the same time, due to the existence of proxy layers such as Convex/Yearn, many ordinary users and even loyal users hope that they will not lose liquidity and flexibility while earning income, and will gradually choose to delegate governance in these projects.

From this vote, we can also see some clues that the future governance of Curve Mich may not be the protagonist, but in the hands of these big voters, when there was a problem with Aave’s governance before, some people put forward the idea of “delegated governance/elite governance”, which is actually more similar to the current structure of Curve. As for whether it is good or not, it will take time to test.