Crypto community members have recently called out decentralized finance (DeFi) projects Curve Finance and YFValue, which have a combined $1.2 billion total value locked (TVL), for having gross governance issues.
According to a tweet from yEarn founder Andre Cronje, Curve Finance CEO Michael Egorov took over 71% of the total voting power during a government proposal regarding the project. What is more, another 8.7% of the total voting power has been found to belong to another co-founder.
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
Egorov did not deny the allegations, saying that he did so because he overreacted. He then offered a suggestion to “fix” the issue.
He admitted through a couple of messages on Telegram,
People didn’t lock much except for 0x431 (yearn) and myself trying to outweigh. But I over-reacted. Terribly sorry. Let’s fix that. I mean, I can abstain from voting but better to fix it in a proper way.
Egorov has let go of some of his control over Curve Finance, even though he still wields a hefty amount of voting power at this time.
Meanwhile, newly-launched project YFValue encountered two issues, which are the fund lockup of “Pool 0”, and the vETH/vUSD minting key oversight. YFValue made a human error during its launching by clicking on the wrong transaction confirmation when trying to remove its control of the pool.
Realizing this error and in the attempt to maintain decentralization, the team chose to relaunch the next day by opening a separate seed pool (Pool v2) while penalizing themselves by burning the same amount of tokens from their developer fund.
Other community members noticed the mistake and exploited it by continuing to farm in pool 0 regardless of the warnings and the removal of the frontend UI.
The YFValue team burned the minter key in response to the incident. To prevent others from losing their assets forever, the team advised all to unstake their funds from the said pool while the time allows.
The total value of cryptocurrencies locked (TVL) in the above-mentioned DeFi projects has grown to $1.2 billion. Meanwhile, the entire DeFi market has a TVL of $6.92 billion, according to DeFiPulse.