Summary:
Stop selling 100% of our farmed CRV and start using part of them to gain voting power on Curve through the Stake DAO CRV Liquid Locker, to maximize the efficiency of our strategy to maximize Frax liquidity and its domination in the algorithmic stable coin ecosystem.
Context:
With $1.8 billion deposited on Curve via AMOs, Frax is one of the largest CRV farmers in the ecosystem. However, since we were not allowed to obtain a whitelist on Curve’s governance to have the possibility of locking those CRV and voting on Curve, we were forced to sell them. Today, we have the possibility of voting on Curve with those CRV via Stake DAO’s new whitelist-as-a-service offer.
StakeDAO, (with which we already have partnerships on different fronts), recently released a “Whitelist-as-a-Service” offer, an alternative solution of liquid form for veMODEL tokenomics. They have already released a liquid locker for $ANGLE, $FXS and $CRV (https://lockers.stakedao.org/). They also just passed a vote to have a gauge for their different sdTKN/TKN pools on Curve.
How do liquid lockers work ? (example for $CRV)
The liquid locker has a Curve whitelist, a reward contract, and a Curve Factory Pool. The $CRV staked in the liquid locker are locked for 4 years and perpetually relocked.
This locking allows maximized voting power and rewards.Whenever a governance proposal is listed on Curve’s governance, it is automatically reflected in the sdCRV snapshot, and every other week, a gauge vote is published on this Snapshot. sdCRV stakers can then vote for their preferred pools or governance choices, and those votes will be reflected directly in Curve’s governance.
They also mentioned they were targeting to make these lockers cross-chain, which could be interesting for the $CRV we farm on other chains in the future.
$sdCRV holders will be allowed to stake in them on StakeDAO to receive:
- Native APR (rewards in 3crv)
- Share of 8% of all the corresponding strat rewards (rewards in $CRV)
- The ability to vote or sell their voting rights from their $sdCRV
- Additional SDT incentives (rewards in $SDT)
Recap:
Rationale:
The goal of this proposal is to start using part of our farmed $CRV to gain a better edge in the Curve lobbying ecosystem. Part of our farmed CRV could be locked in the $CRV liquid lockers created by Stake DAO and would have a voting power even without having a whitelist directly on Curve. Furthermore, as Frax already owns some SDT, we will benefit from a boost on our rewards and CRV voting power.
By using Stake DAO’s CRV liquid locker, our CRV would be put to work and we would benefit from:
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veCRV trading fees in 3CRV (as if we were locking CRV for 4 years)
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Additional yield paid in CRV (platform fees coming from boost mutualisation)
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SDT incentives, which would allow us to boost our yield and voting power if locked on Stake DAO
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Liquidity (possibility to exit whenever we want through a pool on Curve. Liquidity TBC)
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And the most important: voting rights on Curve to boost our pools or pass governance proposals. We could even boost our voting rights up to 2x by holding veSDT (cf this medium). We could use the 3CRV farmed to increase the liquidity of FRAX, use the CRV farmed to increase again the yields and create a voting flywheel offor our pools via voting on Curve;, finally and lock the SDT to boost our yield and voting power on Curve.
Building an $sdCRV position would allow Frax to gain more voting power over Curve’s governance, thus boosting $CRV rewards for our pools. Furthermore, with the reduced selling pressure on $CRV, they APY should structurally go up, increasing the DAO’s revenue and attractivity of our pools.
As the $veCRV will be cross-chain and cross-chain gauges are already a reality via Multichain any calls, if Frax decides to launch cross-chain AMOs, it may be possible to stake the $sdCRV directly on the chain where the $CRV is farmed.
Technical implementation:
No technical development needed.
Timeline and Roadmap:
- Discussion on the forum (5 days minimum)
- Modify the proposal including commentary
- Publish the proposal on Snapshot
Voting Options:
- Yes, allow depositing a portion of our farmed CRV into Stake DAO liquid lockers
- No, do nothing
- Abstain