Curve has compensated its lenders for protocol-level losses before — at least twice.
The first was Vote #521 (executed Dec 21 2023, 88.73% YES of cast veCRV) — 71.77M CRV (~$44.5M at vote-time CRV spot) distributed to LPs affected by the Vyper compiler exploit. Mechanism
was a VestSplitter contract with 365-day vesting and pro-rata claims, code already in the curvefi org and fully reusable. A sibling Vote #593 followed in Feb 2024, adding another 4.6M CRV.
Forum: https://gov.curve.fi/t/proposal-to-recompensate-lps-affected-by-curve-pool-exploit/9825
Sibling: https://gov.curve.fi/t/9877
VestSplitter code: GitHub - curvefi/vest-split: Split VestingEscrow for multiple users · GitHub
The second was the June 2024 crvUSD depeg compensation — 112,637 CRV (~$31K) to affected users. Smaller in scale, but the principle is the same: protocol-level losses don’t fall entirely on the user side.
Forum: Curve Grant compensation for affected users of the June 12th crvUSD de-peg incident
So the question for this thread isn’t whether the DAO has authority to share protocol-level losses with lenders — that’s settled precedent. The question is which structure fits this case.
Three templates that have already worked in DeFi:
-
The most recent passing template at Curve is Vote #1297 (executed Dec 29 2025) — 99.50% of cast votes, 80.82% of supply. Structured with explicit vesting parameters and
proportionality framing. Curve.finance -
Inverse Finance DOLA Repayment Program — running since September 2022 (~3.5 years), structured around protocol revenue rather than a one-time grant. Mills #305 (July 2025) eliminated
$2.6M via an INV strategic-mint swap; Mills #345 (February 2026) removed the minimum-repay floor. Funding mix: DBR yield + INV swaps + veNFT-collateralized loans. No new token mint, no
holder dilution. Inverse Finance - Proposal Details — Inverse Finance - Proposal Details -
YIP-86, Yearn → Resupply Loan — passed July 2025. $1.13M crvUSD principal at 6% APR, with 100% of Yearn + Convex permastaker revenue (~$31.5K/week = 34.6% of Resupply protocol
revenue) committed to repayment until the loan is closed. 4-month off-track trip-wire. Loan disbursed and currently servicing.
YIP-86: Resupply Bad Debt Repayment Loan - Finance - yearn
The point of listing these isn’t to prescribe a specific outcome — it’s that the lender-bears-100% framing skips a class of solutions adjacent DAOs (and Curve itself) have run successfully.
There’s also a separate dimension here — independent of the liquidation-mechanism debate.
The bad-debt accumulation timeline (October 2025 → April 2026) ran for six months without a front-end disclosure on the deposit page. New lenders deposited capital during that window
into a vault with structural impairment already on the books. Lenders accept liquidation-gap risk as part of the lending model — that’s understood and priced in. What’s harder to defend
is silent six-month accumulation of impairment without surfacing it where new capital could see it.
Scale check: full-protocol Curve DAO revenue runs around $8.6M/yr (DefiLlama 6-month trailing — https://defillama.com/protocol/curve-finance). A revenue-linked program at the YIP-86
cadence sits comfortably inside the precedent envelope. The Treasury accumulator at 0x6508eF65b0Bd57eaBD0f1D52685A70433B2d290B (owned by the Ownership Agent) supports the same Agent.execute(retrieveTokenExact(…)) primitive that already ran in Vote #1381 — no new infrastructure required.
Happy to share calldata templates and live Treasury balance reads if useful for whoever wants to draft the technical side.