- Curve Finance recently held its first governance vote.
- Curve founder Micheal Egorov has ended up with over 70% of the voting power.
- He said that what he did was an attempt to prevent Yearn Finance from dominating the protocol.
The CEO and founder of Curve Finance, Micheal Egorov, currently controls 71% of the decentralized exchange’s (DEX) governance voting power. Curve (CRV) is a DEX liquidity pool on Ethereum that facilitates efficient stablecoin trading.
Curve lets CRV holders lock up their tokens to receive a separate voting token - veCRV. Holders can further use veCRV to vote on network proposals that are submitted via the Curve DOA. Users who hold a high amount of the voting token can also submit their proposals for consideration.
Since the launch of the token in August, only a few CRV holders have vote-locked their holdings. This has left only a handful of addresses with a significant amount of voting power. According to a Decrypt report, Egorov mentioned that only 6.7% of the ten million CRV tokens in circulation are vote-locked at the moment, indicating that only a few holders are taking part in the DAO.
This would make it simpler for an address running a Curve liquidity pool on another protocol (such as Yearn Finance) to gain control of a huge portion of the voting power. In an attempt to prevent this from happening, Egorov extended the “vote lock” for over 620k tokens under a single address, effectively gaining over 70% of the voting power. The longer a user locks up their holdings, the more voting power they have. Egorov maxed out his voting period for four years.
Yearn founder, Andre Cronje, took to Twitter to share his thoughts.
So... @CurveFinance founder just took over 71% of the voting power;— Andre Cronje (@AndreCronjeTech) August 23, 2020
And since founder rewards are significantly higher than LPs and other voters, pretty much locked everyone else out.
So guess voting is pointless now.
Have fun everyone. pic.twitter.com/xgkxNpbjUz
The CEO of Curve said on Telegram that what happened from his end was an “overreaction.” The Curve team is currently encouraging its native token holders to lock up their CRV holdings to balance the present voting structure.