Curve founder raises voting power on Curve DAO to 71%

The founder of the DeFi startup Curve, Mikhail Egorov, has secured 71% of voting power on the platform. After criticism from the community, he reduced his stake to 60%.

So… @CurveFinance founder just took over 71% of the voting power;

And since founder rewards are significantly higher than LPs and other voters, pretty much locked everyone else out.

So guess voting is pointless now.

Have fun everyone. pic.twitter.com/xgkxNpbjUz

— Andre Cronje (@AndreCronjeTech) August 23, 2020

Holders of CRV can lock their tokens in exchange for veCRV, which grants voting rights on the Curve DAO platform. Egorov has locked 621,860 CRV, receiving 618,568 veCRV. This volume of coins gives him 71% voting power, allowing him to single-handedly approve or reject any proposal.

As claims Egorov, he has boosted this figure to overcome the influence of the Yearn.finance platform, which manages Curve’s liquidity pool. He added that he is prepared to reduce his own voting power, but for that the community would need to lock their tokens and participate in the platform’s governance.

Yearn.finance founder Andre Cronje noted that to bring Egorov’s voting power down to 50%, users would need to lock at least 150 million CRV for a week, which is more than 15 times the available supply.

As a benchmark for decentralised governance, Cronje pointed to the project Compound, where 32.83% of tokens participate in voting. For Balancer, this figure is 2.67%, though token distribution across wallets also indicates a high degree of decentralisation.

Doing analytics for different governance protocols. I consider @compoundfinance as one of the gold standards, pleasantly surprised that 32.83% of tokens are participating in governance. And respect to @rleshner for giving up as much control as he did.

Voting power distribution; pic.twitter.com/PuDzox8Qoi

— Andre Cronje (@AndreCronjeTech) August 24, 2020

Curve project lead Charlie Watkins believes the situation will be resolved soon through increased user activity. The inflow of locked tokens will enable greater decentralisation of the platform.

Synthetix founder Kane Warwick believes that centralisation of a number of DeFi projects will only grow, threatening their security.

On-chain governance dumpster fires are going to get way worse soon. I had hoped Tezos would have proven this by now, but the stakes were simply too low for anyone to bother. DeFi TVL is going to drive all kinds of governance attacks and most protocols are woefully unprepared.

— kain.eth (@kaiynne) August 23, 2020

As of writing, Curve ranks third by assets locked in the protocol, at $1.11 billion. Over the past 10 days this figure, per Defipulse, has risen more than fourfold,

Earlier this month, an anonymous developer triggered an unplanned launch of Curve protocol governance contracts and distributed CRV tokens ahead of their official announcement.

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