Curve Finance Token Holders are Reaping Rewards

Curve Finance users are getting a steady stream of rewards lately.

In the last month, holders of the Curve voting token veCRV have gotten news of airdrops from two separate projects. Frozen Yoghurt, a Curve Finance fork, launched this week on the Fantom blockchain, but the project will airdrop its token, FROYO, to holders of veCRV (as well as to liquidity providers for the FROYO token). And in mid-April, Convex Finance, which aims to boost rewards for CRV stakers and liquidity providers, announced it will also be airdropping CVX tokens to veCRV holders once the project launches in May.

These third-party project drops underline the sometimes overlooked importance of veCRV in the DeFi ecosystem. Curve is one of the few DeFi projects with a governance staking contract that rewards users with more tokens the longer they stake.

Lockup Period

According to a Coinmonks report, the average lockup period for Curve stakers is 3.63 years (the maximum lockup period is four years). Plus, Curve users must pre-commit to the amount of time they will lock up their CRV. Both these things make veCRV holders more dependable in many project’s eyes since it demonstrates a significant commitment to the Curve automated market maker.

This kind of commitment has been rare in the DeFi world, which typically see yield farmers moving around protocols on a daily basis as they search for the best payouts.

Cherry on Top

When users lock CRV in the protocol they receive governance rights, 50% of the Curve trading fees on the AMM, and the ability to “boost” their liquidity provider rewards up to 2.5 times what they would be otherwise. The recent flurry of airdrops have likely been a nice cherry on top.

Ellipsis, another Curve Finance fork which launched in March, also airdropped its token to veCRV holders. Plus, trading fees from Curve’s deployment on the Layer 2 solution Polygon, also accrue to veCRV holders.

As Twitter user Cryptoyieldinfo said in response to the FROYO airdrop, “veCRV gives and gives.”