Curve Finance Yield Basis Proposal: $60M Plan to Transform CRV into Income-Generating Asset

Curve Finance founder Michael Egorov has introduced a groundbreaking proposal on the Curve DAO governance forum that promises to revolutionize income generation for CRV token holders. The innovative Yield Basis protocol is designed to provide sustainable yields to CRV holders who stake their tokens for governance participation, receiving veCRV tokens in return. This strategic move represents a significant evolution from the platform's previous airdrop-based token economy. The comprehensive $60 million plan involves minting Curve's crvUSD stablecoin to establish three bitcoin-focused liquidity pools - WBTC, cbBTC, and tBTC - each with a $10 million cap. Yield Basis will allocate an impressive 35-65% of its value to veCRV holders while dedicating 25% of tokens to the broader Curve ecosystem. The governance vote for this transformative proposal is scheduled from September 17-24. This advanced protocol specifically targets institutional and professional traders by offering transparent bitcoin yields while effectively mitigating impermanent loss risks common in automated market makers. Impermanent loss, which occurs when pooled assets' values fluctuate compared to direct holdings, has been a persistent challenge for liquidity providers. The proposal emerges despite recent financial challenges faced by Egorov, including several high-profile liquidations in 2024 involving leveraged CRV positions. Notably, June saw $140 million in CRV positions liquidated, resulting in $10 million in bad debt for Curve. CRV has demonstrated resilience with a 1% price increase over the past 24 hours.