coltonberry.eth has created a Python script to simulate how much future CRV a single veCRV generates. The simulation yields a result of 7.18 additional CRV. coltonberry.eth says:
veCRV has fundamental value because of trading fees. veCRV can be used to produce more CRV. So, you can think of some amount of veCRV today, as some greater amount of veCRV in the future, proportional to the supply cap. From this, you can target some interest rate (I chose 7%) and project some growth, to determine what the fair buy-in price would be today. Currently, without any growth projection, I sloppily calculated this fair buy-in price to be $2.81 for 7% interest once the supply cap is reached. But right now, most things are extremely over valued due to speculation (some startups have a valuation like 50-100x their ARR). So I think buying for 3x more than its "fundamental value" of $2.81 is actually pretty fair
What do you think? How would you go about valuing CRV and veCRV?
Thanks for the intro for CRV/veCRV, a little bit confused the veCRV holder only received the 0.5 fees from trading, and not the additional CRV emission right?
Thanks for the intro for CRV/veCRV, a little bit confused the veCRV holder only received the 0.5 fees from trading, and not the additional CRV emission right?
Correct, the receivers of CRV emissions are the LPs of gauge-boosted Curve pools.
Thanks for clarification, just looked into the code, line 70-71 does not make much sense then...
I think CRV/veCRV is a little over valued. But, at current prices are fairly priced considering Convex's extra yield for cvxCRV stakers.