Curve Finance has revamped its fee distribution system, shifting from the 3cr token to its native stablecoin, crvUSD. This change is designed to enhance the utility of crvUSD and integrate it more deeply into the Curve Finance ecosystem, thereby incentivizing user participation.
Source: Curve Finance
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Key Information for Users
A press release shared with Cointelegraph outlines that the new fee distribution in crvUSD will create “an additional supply sink for the stablecoin.” This sink is primarily due to uncollected fees, potentially increasing the total value locked (TVL).
Michael Egorov, the founder of Curve Finance, discussed with Cointelegraph how this change will impact users of Curve Finance.
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Encouraging Community Engagement
The press release notes that distributing fees in crvUSD will motivate users to utilize the stablecoin, fostering greater engagement with products and services that incorporate it. Egorov mentioned that Curve users could deposit crvUSD back into the ecosystem using the fees they earn.
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Addressing Transition Risks
Curve Finance acknowledged potential liquidity concerns and other risks associated with this transition in their press release. Egorov highlighted a few potential risks, such as operational risks and asset age, but assured that these have been mitigated during the preparation phase for the required on-chain votes. Since all relevant votes have passed, these risks are now under control.
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