CRV vault strategy to benefit all vaults using Curve

Summary

Build a CRV vault which gains yield from both the veCRV lock and also claims a small percentage of boosts to all bitcoin/stablecoin curve pools. Designed this way, this CRV vault would in theory be even higher yield than CRV locked directly as veCRV on Curve.

Abstract

veCRV is the critical advantage that Yearn can have in providing stablecoin/bitcoin depositors across several Yearn vaults with boosts in yield, and a serious amount would also be an insurmountable moat against yearn competitors who are using Curve for yield. YFI could pool CRV into the 4 year lock veCRV then directly receive the veCRV holder APY (at time of writing 275% APR). However, on top of this the CRV vault depositors would also receive a percentage, say 5%, of the boosts to all the other Yearn vaults which use Curve. The depositors of stablecoins/bitcoin in other vaults will be happy as they have a higher boost due to increased veCRV boost. The depositors of CRV will be happy as they have an even higher return on their deposit than veCRV locked directly on Curve. The Yearn CRV vault would have a higher yield than the direct Curve lock, and could grow to become the biggest $veCRV owner. There is one major challenge - this pool would not be as liquid as a regular vault due to the 4 year $veCRV lock on the capital. Strategies around this may be implementing some sort of lock at the Yearn vault level, or other restricted withdrawal limits.

Motivation

Optimal use of Curve remains the key yield farming strategy for several pools today. Yearn needs a huge and growing pool of locked veCRV to support high yields across multiple vaults as deposits of stablecoin and bitcoin increase.

Specification

  • Establish yCRV vault with either restricted withdrawals or locks.
  • Gain yield from both veCRV 4 year lock return as well as a small percentage (5%?) of all boosts to stablecoin and bitcoin curve vaults.

For

  • Better yield for CRV even relative to Curve direct.
  • Better yield for all stablecoin and Bitcoin yearn vaults through the boost.
  • A massive veCRV pool provides a major competitive sustainable advantage for Yearn for all yield strategies that use Curve.
  • Now is the optimal timing as the veCRV rewards start getting released in next few days.

Against

Challenge of dealing with liquidity assuming most CRV will be in the 4 year lock.

8 Likes

@cryptoyieldinfo what a beautiful vision!

  • I think it is very important to think in years regarding the vaults!
    If this vault and 4-year-lock-strategy can benefit all other CRV strategies + be profitable to those of the yearn community who deposit into it, then it is just what we need!

This is an excellent proposal, with some out of the box thinking I’ll summarize as “What if we let one Vault trade positions with another?”

This is really genius, because the timelock creates a tough condition if you are selling CRV for a boost, but it creates an efficiency if you simple “trade” (at some discount e.g. 5%) with a vault that took a long position on CRV instead.

I’d encourage more of this kind of thinking, Vault to Vault position trading (through Strategy interactions) are a great way to create efficiencies across the Yearn ecosystem that creates positive value overall.

2 Likes

Thanks @mart and @fubuloubu

I hope we can push forward with this.

If Yearn has an insurmountable moat of $veCRV, other yield aggregators will not be able to compete with Yearn in use of Curve for yield.

And yields across everything - stablecoins, BTC, and soon to be ETH on Curve will all be boosted.

1 Like

Thanks for going ahead with this @banteg and @fubuloubu with ybackscratch.

No doubt you were planning this well before I posted this.

Just adding 10% of CRV from other pools is simpler solution much better. And having it lock forever is best, can just keep pushing back the 4 year boost for full lock.

There is no way others can compete once the veCRV builds up.

All - if you want to support yearn (and YFI price), add CRV into this ybackscratch.

Unless you are a master of Curve willing to spend a lot of time and gas rebalancing pools every week this is best place for your CRV.

1 Like

For anyone wanting to try it out.

1 Like

This vault is now live at https://crv.ape.tax. This vault will lock your crv as veCRV forever, and you will not be able to withdrawal your crv tokens. You lock up your crv for the curve admin fees which are distributed to veCRV holders which is paid out in 3pool tokens.