Curve Tokenholders Reject $6.2M Swiss Stake Funding Proposal Amid Centralization Concerns

Curve Finance Governance Vote Analysis

Curve Finance's tokenholders rejected a governance proposal to allocate 17.4 million CRV tokens-worth approximately $6.2 million-to its core development team, managed by founder Michael Egorov's firm Swiss Stake AG. The vote saw 54.46% of participants oppose the allocation, while 45.54% supported it. Voting data revealed that nearly 90% of the opposition came from addresses linked to two major DeFi protocols, Yearn Finance and Convex Finance.

The proposal aimed to fund software development, infrastructure, security work, and team support for Curve's third-largest DEX in DeFi, with over $2.1 billion in total value locked. Community members expressed concerns over centralization, questioning the reliance on a small group of major stakeholders to shape governance decisions. Some suggested that Swiss Stake should provide clearer details on past fund usage before new grants are approved.

Additionally, tokenholders argued that prior allocations had already distributed significant protocol funds, and future grants could be better spread out to avoid negative impacts on the price of CRV. This is the second time Egorov has sought approval for such a grant, following a successful $6.3 million allocation in August 2024.

Why the Standoff Happened

The rejection highlights ongoing tensions around governance structure, funding transparency, and the concentration of voting power within major DeFi protocols. Critics argue that large stakeholders, like Yearn and Convex, hold disproportionate influence over Curve's decision-making. This concentration of voting power has sparked broader debates on decentralization and the fairness of governance mechanisms in the DeFi space.

Some members of the Curve community noted that past funding decisions lacked sufficient transparency. They argued that Swiss Stake should demonstrate how previous allocations were used before requesting further funds. Others suggested that future grants be distributed in smaller installments to avoid market volatility for the CRV token.

How Markets Reacted

Despite the rejection, the CRV token saw a short-term price boost, with a 5.4% gain over 24 hours to trade at $0.377. The price movement signaled continued investor interest in Curve, even amid governance challenges. However, CRV has fallen nearly 50% over the past three months, according to CoinGecko data.

The vote also drew comparisons to similar controversies at Aave, where Aave Labs faced criticism for redirecting fees to itself rather than to the DAO. The Curve community appears to be applying tighter scrutiny to funding proposals, reflecting a broader trend of increased oversight in DeFi governance.

What This Means for Investors

The rejection of the CRV grant proposal underscores the evolving expectations of DeFi tokenholders regarding transparency and accountability. Investors are now demanding clearer justifications for funding requests and more detailed reporting on how funds are used.

For Curve Finance, this outcome suggests that future funding proposals may need to include more granular breakdowns of expected outcomes and past performance. It also highlights the importance of managing tokenholder sentiment, particularly among influential stakeholders like Yearn and Convex.

The broader DeFi ecosystem is likely to continue facing similar governance challenges as projects grow and seek larger funding allocations. As investor expectations evolve, DeFi protocols may need to adopt more structured reporting practices and implement mechanisms to ensure that governance remains aligned with community interests.

Source

According to reports, Curve DAO rejected $6.2 million in funding for Swiss Stake. As detailed on Phemex, Curve DAO rejected a $6.2M CRV grant proposal. According to CoinEdition, Curve DAO rejected a $6.2M CRV grant for core development. The Curve community has voted to reject the "Appropriate 17.45M CRV for R&D and Team Support" proposal.