The decentralized cryptocurrency trading protocol Curve recently launched a new decentralized stablecoin Savings crvUSD (scrvUSD) and initiated a proposal to change its revenue model, aimed at allowing 10% of the transaction fee revenue generated from crvUSD borrowing to flow to the scrvUSD Yearn vault, enabling scrvUSD holders to receive ongoing returns.

The proposal entered the voting process on November 3, having received about 92% support in votes before the deadline, with voting set to end on November 9.

According to information on GitHub, ScrvUSD represents users' crvUSD deposits, allowing depositors to earn returns from the transaction fees generated by the crvUSD controller. Curve's governance page indicates that the controller serves as the on-chain interface for creating loans and managing existing positions.

Curve founder Michael Egorov stated that the purpose of the proposal is to promote the growth of the crvUSD stablecoin, which currently has a market value of $60 million. He explained on the community platform X last week how the proposal would lower the borrowing rate of crvUSD, reducing borrowing costs and helping to increase the supply of crvUSD.

Many don't seem to understand the real reason behind scrvUSD. Briefly: it can scale crvUSD. Not always such a method can, but for us it can:– scrvUSD savings rate = HODL rate (what people agree to be paid to hodl crvUSD);– If borrow rate < HODL rate -> cannot scale, need to… https://t.co/Icc7rmHY6T

— Michael Egorov (@newmichwill) November 2, 2024

In theory, if the proposal is passed and the scale of crvUSD indeed expands, in the long term, the agreement will create more revenue for governance members, but in the short term it will not. A member of the Curve community, crv.mktcap.eth, stated that this proposal will be detrimental to veCRV holders in the short term (veCRV represents the locked tokens of the Curve governance token CRV).

crv.mktcap.eth explained that the agreement currently distributes all interest fees from crvUSD to veCRV holders; if the new proposal is accepted by Curve's governance body, 10% of the borrowing fees will flow to the scrvUSD vault, meaning that veCRV holders 'must forgo some income to pay for this savings rate.' However, crv.mktcap.eth believes that the ultimate goal of increasing the supply of stablecoins will lead to veCRV holders accumulating more absolute income in the long run.

According to data from CoinMarketCap, the price of CRV has dropped by 9.7% over the past month, with a trading price of $0.2315 before the deadline.

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