crvUSD

UwU Lend

Update Aug. 13, 1:52 pm UTC: This article has been updated to correct the emission calculations.
Curve Finance, a decentralized exchange (DEX) and automated market maker (AMM) platform, has announced the annual reduction of its native CRV (<a href="https://cointelegraph.com/curve-dao-token-price-index" text="null" title="null">CRV</a>) token emissions.&nbsp;
According to a press release shared with Cointelegraph, the event marks the fifth consecutive year of emissions reductions “since the token’s launch in 2020.”
<blockquote>
 “In 2020, the issuance stood at 274 million tokens per year, and now, in 2024, this figure has gone down to approximately 137 million.”
</blockquote>
Speaking with Cointelegraph, Michael Egorov, founder of Curve Finance, explained that the inflation reduction mechanism is “modeled” after Bitcoin (<a href="https://cointelegraph.com/bitcoin-price" text="null" title="null">BTC</a>) inflation.
<blockquote>
 “The idea is to get ‘liquidity mining’ working the same way as Bitcoin mining. But it’s difficult to say exactly what the effect will be.”
</blockquote>
Related: <a href="https://cointelegraph.com/news/curve-finance-adopts-crvusd-fee-distribution" text="null" title="null">Curve Finance adopts crvUSD for fee distribution</a>
<h2 id="crv-total-supply-reduction">CRV total supply reduction</h2>
The annual reduction has dropped the total CRV supply to 2.09 billion, with “approximately 930 million” perpetually locked on the platform as vote-escrowed veCRV.&nbsp;
Considering the locked supply, the current circulating supply of CRV tokens is “around 1.16 billion” and aligns with the “end of all vesting periods on Curve’s platform.”
<blockquote>
 “The reduction in emissions and the end of vesting periods happening at the same time means that the overall annual inflation of the CRV token will go down dramatically — from 20% to just around 6%.”
</blockquote>
Egorov noted an “interesting observation” of the liquidity pools on Curve, highlighting that “the biggest liquidity on Curve” doesn’t seem to rely on “CRV incentives.”
<blockquote>
 “So, it seems that reducing emissions towards incentives by 16% should not affect the liquidity.”
</blockquote>

 <hard_break></hard_break>Related: <a href="https://cointelegraph.com/news/curve-ceo-clarifies-uwu-hack-misinformation" text="null" title="null">Curve CEO clears up UwU Lend hack, CRV burn misinformation</a>
<h2 id="curve-dao-implications">Curve DAO implications</h2>
The fifth annual CRV emission reduction and end of vesting periods also co-align with a milestone for the Curve decentralized autonomous organization (DAO).&nbsp;
Curve DAO earnings, “which are entirely allocated to veCRV,” have exceeded CRV emissions for the first time, indicating that the ecosystem is “walking down a path to sustainability.”<hard_break></hard_break>
<blockquote>
 “The increasing number of tokens being locked means that Curve’s participants intend to stay with the platform for the long haul, increasingly committed to its development.”
</blockquote>

 <hard_break></hard_break>Related: <a href="https://cointelegraph.com/news/curve-finance-michael-egorov-bad-debt-llamma" text="null" title="null">Curve Finance’s Michael Egorov says $10M in bad debt fully paid</a>
<h2 id="curve-finance-stablecoin-adoption-for-fees">Curve Finance stablecoin adoption for fees</h2>
On June 28, Curve Finance changed its fee distribution mechanism from the CRV token to the native stablecoin, crvUSD.
The adoption of crvUSD aims to incentivize users while improving the stablecoin’s utility and integration into the platform’s overall ecosystem.
At the time, Egorov told Cointelegraph that the transition meant that users could now obtain fees “in a dollar-denominated stablecoin,” simplifying the process “significantly.”&nbsp;

 <hard_break></hard_break>Magazine: <a href="https://cointelegraph.com/magazine/china-crypto-ban-investors/" text="null" title="null">How Chinese traders and miners get around China’s crypto ban</a>

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Curve Finance reduces CRV emissions, boosting DAO sustainability

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Cointelegraph

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