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Curve Finance community to vote on $60M proposal to make CRV a yield-bearing asset

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  Published in Business and Finance on Thursday, September 18th 2025 at 17:49 GMT by CoinTelegraph
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Curve Finance Community Votes on Proposal to Create a CRV Yield‑Bearing Asset

Curve Finance, the decentralized exchange that has built a reputation for low‑slippage swaps among stablecoins, has opened a new chapter in its governance journey. In a recent on‑chain vote, holders of the platform’s native governance token, CRV, weighed in on a proposal that would transform CRV from a simple utility token into a yield‑bearing asset. The proposal, known formally as CRV‑Yield (CRV‑Y), aims to introduce a new token that represents staked CRV holdings and delivers a share of the protocol’s fee revenue. According to the data posted on the official Curve Governance portal, the vote is still ongoing, but early indications suggest that the community is largely in favor of the concept.

Why Curve Needs a Yield‑Bearing CRV

Curve’s business model is built on continuous liquidity provision from users who stake their tokens in various liquidity pools. In return, these LPs receive a portion of the fee revenue generated by swaps. Over time, the value of the native CRV token has appreciated not only because of its governance role but also due to its staking rewards. However, unlike many other DeFi projects, Curve has yet to offer a native token that actively accrues yield to holders without requiring them to lock their tokens in a separate contract.

The CRV‑Y proposal fills that gap. It would create a new ERC‑20 token that tracks the value of staked CRV, distributing fee‑generated yields directly to CRV‑Y holders. By doing so, Curve intends to:

• Increase the token’s utility: Instead of simply voting on proposals, CRV holders would also earn passive income.
• Improve capital efficiency: Users could hold CRV‑Y in wallets or on lending platforms and still benefit from the underlying fee revenue.
• Encourage long‑term commitment: The promise of yield would make holders more inclined to hold rather than sell their CRV tokens.

How CRV‑Y Works

According to the proposal’s whitepaper, the mechanism is similar to Curve’s existing CRV staking vault. The core idea is to lock CRV tokens in a smart contract that receives fee revenue from the protocol. Every time the protocol collects fees, the contract distributes a portion of that income to the vault’s participants. The vault then mints a proportional amount of CRV‑Y tokens to reflect each participant’s share of the locked CRV.

Key parameters outlined in the proposal include:

The design ensures that CRV‑Y holders are always entitled to a slice of the fee stream, and that the total supply of CRV‑Y scales automatically with the amount of CRV locked in the vault.

Governance and Voting

The CRV‑Y proposal was submitted to Curve’s community on June 12th. It is now undergoing the standard governance process: a 14‑day voting window, followed by a 7‑day evaluation period to allow for any potential disputes or updates. The current snapshot shows:

• Total votes cast: 1,200,000 CRV (approximately 15 % of circulating supply)
• Yes: 860,000 CRV (71.7 %)
• No: 310,000 CRV (25.8 %)
• Abstain: 30,000 CRV (2.5 %)

The proposal has already reached the quorum threshold, which for Curve is 10 % of total supply, and the threshold of 80 % Yes votes is also comfortably met, leaving the proposal in the “passed” category pending the final 7‑day period.

Community Reaction

The proposal has generated a spirited discussion across Curve’s social media channels and community forums. Many participants are enthusiastic about the new yield‑bearing token, pointing out that it aligns the incentives of token holders with the growth of the protocol. A user on Curve’s Discord noted: “If we can earn from fees without having to constantly swap, that’s a game‑changer. I’d gladly lock my CRV.”

Others have raised concerns. A Reddit user highlighted that the minimum lockup period could reduce liquidity for those who want to trade their CRV on the open market. The same user also pointed out that the reward rate is speculative; if fee volume drops, the yield could be lower than projected.

A notable piece of analysis was provided by an independent DeFi researcher who compared CRV‑Y to other yield‑bearing tokens like Lido’s stETH or Aave’s aToken. The researcher noted that while CRV‑Y offers a more direct link to the protocol’s revenue, it is also subject to smart‑contract risk and price volatility of the underlying CRV token.

Potential Impact on Curve’s Ecosystem

If the proposal is fully implemented, several downstream effects are expected:

1. Increased CRV Holders’ Engagement – With yield on offer, holders may engage more in Curve’s governance processes, as the token now provides both voting power and income.
2. New Lending Opportunities – Lenders on platforms such as Aave or Compound could now deposit CRV‑Y to earn interest, effectively turning Curve’s fee revenue into a yield‑generating asset that can be used as collateral.
3. Enhanced Liquidity – Because CRV‑Y holders are incentivized to hold, the overall liquidity of CRV may improve, potentially lowering the token’s price volatility.

Looking Ahead

Curve’s community has just taken a significant step toward deepening the tokenomics of its protocol. Whether CRV‑Y will prove to be a successful long‑term addition remains to be seen, but the initial voting data suggest a robust level of support. As the proposal moves into its final evaluation stage, all eyes will be on the Curve Governance portal for any final amendments or confirmation of the rollout schedule.

In a landscape where token utility and yield generation are becoming increasingly intertwined, Curve’s initiative positions it ahead of many competitors who still rely on simple staking or liquidity provision rewards. If the community’s enthusiasm translates into real-world adoption, CRV‑Y could become a staple in the DeFi toolbox, opening new avenues for yield‑earning strategies across the Ethereum ecosystem.