Behind the rejection of a $17 million CRV grant: weakened founders' proposal power, with Convex and Yearn becoming the main players in governance.

A few days ago, Curve's funding proposal to allocate 17 million to the development team (Swiss Stake AG) was rejected. Convex and Yearn both voted against it, and their votes were significant enough to influence the final outcome.

Author: Chen Mo , cmDeFi

A few days ago, Curve's funding proposal to allocate 17 million to the development team (Swiss Stake AG) was rejected. Convex and Yearn both voted against it, and their votes were significant enough to influence the final outcome.

Since the Aave governance issues began to surface, governance has started to attract market attention, and the inertia of simply providing funding has begun to break. There are two key points behind Curve's proposal:

1. Some voices in the community are not against allocating funds to the AG, but they want to know how the money was used in the past, how it will be used in the future, whether it is sustainable, and whether it has brought benefits to the project. At the same time, this overly primitive grant model means that once the money is out, there are no constraints. In the future, the DAO needs to establish a Treasury, make its income and expenditure transparent, or increase governance constraints.

2. The major voting members of veCRV don't want to dilute their own value. This is a fairly obvious conflict of interest; if the projects supported by the CRV grant cannot predictably generate benefits for veCRV, they are unlikely to receive support. Of course, Convex and Yearn also have their own self-interests and power dynamics, but we won't discuss those issues for now.

This proposal was initiated by Curve founder Mich, and AG is one of the teams that has been maintaining the core codebase since 2020. The roadmap provided by AG for this funding roughly includes continuing to advance llamalend, including support for PT and LP, as well as the expansion of the on-chain forex market and crvUSD. It seems worthwhile, but whether it deserves the 17M $CRV funding needs further calculation, especially since Curve's governance differs significantly from Aave's; its power is distributed among several teams with distinct stances.

Let's compare Ve with conventional governance models:

In conclusion, most conventional governance models currently have virtually no advantages in their design. Of course, if the DAO is mature enough, the traditional structure can also function well, but unfortunately, no Crypto project has reached that level of maturity yet. For example, even Aave, a leading platform with market consensus, has encountered problems.

If we talk about model design alone, Ve has some advantages. First, it has cash flow and liquidity control. When there is external liquidity demand, this power can be bribed. So even if you don't want to lock up your tokens for a long time, you can delegate your tokens to proxy projects like Convex/Yearn to earn returns.

Therefore, Vetoken is a model that links voting rights to cash flow, and its future evolution will most likely follow a "governance capitalism" path. Vetoken links voting rights to "long-term lock-up," essentially filtering out those with large capital, the ability to withstand liquidity losses, and the capacity for long-term speculation. Over time, the result will be that the governance group gradually transforms from ordinary users into a "capital group."

Meanwhile, due to the existence of proxy layers like Convex/Yearn, many ordinary users, and even loyal users, hope to gain benefits without sacrificing liquidity and flexibility, and will gradually choose to entrust their governance to these projects.

This vote also reveals some clues: in the future, Curve's governance may not be primarily driven by the Mich, but rather by those with significant voting power. When Aave encountered governance problems, some proposed the idea of "delegated governance/elite governance," which is actually quite similar to Curve's current structure. Whether this is good or bad remains to be seen.

Disclaimer: As a blockchain information platform, the articles published on this site represent only the personal views of the authors and guests and do not reflect the position of Web3Caff. The information contained in the articles is for reference only and does not constitute any investment advice or offer. Please comply with the relevant laws and regulations of your country or region.