Michael Egorov, founder of Curve Finance, released a governance proposal on Monday, calling for significant funding to support continued development through his company Swiss Stake AG.

The proposal calls for 21 million CRV tokens, worth about $6.3 million at current exchange rates, to cover operating costs for one year. The primary goals of the funding are to expand Curve’s stablecoin, crvUSD, improve the efficiency of FX markets, and develop crvUSD-based leveraged products.

Egorov stressed the importance of maintaining constant development to avoid stagnation, especially in aspects like security auditing, which consumes a large portion of the budget. However, the proposal has sparked a heated debate within the Curve community, with many members expressing serious concerns.

One of the most common criticisms is the vagueness of the proposal. Community members, using pseudonyms like Intrepid_llama, argue that the proposal lacks a clear roadmap, specific allocations for funds, and specific performance metrics.

The lack of a detailed plan for how the funds will be used has led to accusations of irresponsibility, with some members saying they would not support the proposal unless it was significantly amended to include the necessary information.

“This proposal, as currently written, hands over 21 million CRV… with no control over how it is spent – ​​only an obligation to provide a summary report half a year later. This is unacceptable,” Intrepid_llama wrote.

In his response, Egorov said his lawyers had advised him not to provide too many specifics. However, he expressed a willingness to challenge these restrictions to provide more clarity.

This explanation, however, has not satisfied critics, who point out that other DeFi projects – like Aave – are much more transparent in their funding requests.

While the work of Egorov's team was highly praised, the post also highlighted “notable failures” such as the mass liquidation of Egorov's personal CRVs in June.

Community member Crvnon pointed to “poor ability to cooperate with major shareholders, as well as the capital and reputational damage caused by the liquidation event to every team and protocol associated with Curve,” calling these “entirely avoidable, self-inflicted failures.”

In an interview with Blockworks before this governance proposal was announced, Egorov shared that he would rather keep CRV tokens than accept the liquidated loans he had borrowed.

“It wasn’t an easy decision, but I’m glad that a large amount of CRV is locked in to generate revenue from the system,” he said. “There are big plans for Curve and they’re not going to stop anytime soon – I’m even more motivated to make them happen as quickly as possible.”

Some community members are concerned about the long-term sustainability of the proposal, especially since it will cost a significant portion – around 50% – of the community fund. They argue that without clear growth and revenue generation goals, the sustainability of the ecosystem will be threatened.

Several members, including Cryptoinvest and boz_m, stressed the need for operational transparency. They proposed splitting the funding request into quarterly segments with accompanying targets, and suggested pricing in crvUSD instead of using the more volatile CRV tokens.

Curve Finance conducted its fifth annual CRV token halving on August 13, reducing the inflation rate to 6%, according to a Curve spokesperson.

“The amount of CRV locked as veCRV over the past two months has far exceeded the total inflation expected for the coming year, and the growing number of locked tokens shows that Curve participants intend to stay on the platform for the long term, becoming increasingly committed to its growth,” Curve stated.

Community members argue that using crvUSD will better protect community funds from market fluctuations and provide clearer accountability.

Boz_M calls for “specific performance metrics or milestones so that investors can track progress and evaluate the success of funded initiatives.”

Egorov was aware of these criticisms and expressed his willingness to make adjustments to the proposal, in particular by providing more details on how the funds will be used. He also pledged to provide more clarity on the financial allocation plan to ensure transparency and trust from the community.

The proposal is expected to be revised based on the feedback received before an on-chain vote, which will last for a week. The outcome of this vote will determine whether the proposal passes, and more importantly, whether the Curve community can reach a consensus on how to maintain and grow the ecosystem in the future.

Meanwhile, the debate surrounding Egorov’s proposal reflects a larger issue in DeFi projects: the balance between innovation and accountability. For projects like Curve Finance, where community trust is fundamental, achieving transparency and clarity in funding requirements is essential to maintaining community support and engagement.

Curve’s success in dealing with these challenges will not only shape its own future, but could also set a precedent for other DeFi projects as they face future funding and governance requirements. As competition in the decentralized finance industry increases, decisions like these will determine whether Curve can continue to maintain its leadership position.


Source: https://tapchibitcoin.io/curve-founder-faces-with-community-discussion-on-department-of-investment-in-the-roof-the-dao.html