Proposal of purchasing CVX token to increase CRV incentive for UST curve pool

  1. Why Curve and CVX?

Curve pool is the largest stable coin pool and provides low slippage. It is where the whales and institutions use to swap stable coins.

Different stable coin pool compete by 1). providing more incentive directly 2). vote to provide more CRV incentive. Higher the incentive, larger TVL and thus lower slippage.

Convex ($CVX) is a ethereum yield farming tool highly integrated into curve. CVX owns a big portion of Curve token and thus can vote on Curve to guide the $CRV incentives. CVX also provide incremental incentive in the form of $CVX token, and thus become the no.1 choice for stable coin LP. Currently it has the largest TVL (over YFL).

  1. What needs to be done:
    Instead of buying $CRV token and vote, I suggest to buy $CVX token. As CVX token has the control of all the $CRV token owned by convex. Currently CVX controls 32% of CRV token.
    check this: Governance of DeFi Giant Curve in Flux as Smaller Convex Exerts Control - The Defiant

  2. Benefit:
    by purchasing $CVX token, terra is able to vote increase $CRV inventive of the UST-3CRV pool. The benefits are:

  • $CRV incentive is well recognized by the ethereum community and has stable price
  • in doing so, Terra community pool holds CVX token as assets (and have yield) and thus does not require continuous investment of native Luna incentive.

This is a common way of increasing liquidity of stable coin. This can be done on top of the native Luna incentive provided by community pool.