- The CRV token’s annual inflation rate will decrease from 20% to 6%.
The second-largest decentralized exchange (DEX) according to TVL, Curve Finance, announced that it will stop token inflation annually after five years.
Starting this year, the inflation rate for CRV tokens will decrease from 20% to 6%
The yearly emission rate of the token has been decreasing, as per a release; by 16% annually. 274 million tokens were issued at the time of debut in 2020; by 2024, that number has dropped to 137 million.
Today, CRV increased by 5% to $0.30. Ahead of today’s emission reduction, the token gained 35% in value over the previous week. The CRV has had a 40% loss on a yearly basis and a staggering 98% decline since its launch in August 2020.
The Curve ecosystem’s members are happy about a step toward sustainability. The project’s DAO said that earnings have surpassed issuance in addition to the decrease in emissions. All earnings go toward the veCRV, their governance token.
CRV holders have extra reasons to celebrate. Dune claims that users are locking in record amounts of CRV, with a new all-time high of 881 million CRV, or $264 million, deposited and permanently locked in the protocol.
According to the email statement, all of this data serves to demonstrate how Curve Finance’s tokenomics is continuing to mature and stabilize, guaranteeing its survival for years to come.
Termination of Vesting
The conclusion of Curve Finance’s vesting period is another highlight.
According to Michael Egorov, the founder of Curve Finance, the first benefit of this event is that a lot less tokens are entering circulation. One commonly expressed worry is that this might make me less motivated to keep developing Curve. Nevertheless, I am unable to unlock a substantial portion of CRV tokens that I have locked as veCRV. Despite this, I can still earn protocol fees, so my incentive to keep developing the platform remains plenty strong.
Curve has been gradually releasing CRV tokens since its inception, and today marks the end of the longest vesting period. Interestingly, holders with the longest vesting window did not sell off a significant portion of their holdings at that time, suggesting that early adopters were committed to the product over the long run.
That feeling is consistent with what Egorov has said in the past
Users began locking CRV tokens in record quantities at the beginning of July, and the rate of lockup increased 100 times over earlier times. This implied, in Egorov’s opinion, a possible resurgence of protocols bidding to gain greater control over Curve.
According to Egorov, the data also suggested that investors were becoming more aware of the significance of governance and fee distribution. This might represent a seismic shift in users’ perceptions throughout an ecosystem that is unduly preoccupied with profit.
Market Declines
Despite the festivities, things are not perfect at Curve.
DefiLlama claims that Curve Finance’s total value locked has been steadily declining. Even though its DEX is currently valued at $1.85 billion, second only to Uniswap’s $4.5 billion, it has experienced a significant decline from its peak of $23 billion on January 5. Uniswap TVL has also decreased since May 2021, when it peaked at $9.9 billion.
The market capitalization of the token has suffered a similar fate. The market value of CRV has decreased from $2.5 billion in 2021 to $367 million.
The team is hoping that the combination of the three factors—a decrease in emissions, an increase in earnings, and record user interest in locking in CRV tokens—will buck the project’s trend.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
