Some facts that should be on the table before this proposal moves to vote.
The CRV-long LlamaLend market has been distressed since October 2025. As of today, that is roughly seven months of bad debt sitting on a Curve-operated lending market with no funding source attached to its recovery. Vote #1400 deployed a permissionless recovery pool on 2026-04-30 to handle the exit. The pool currently sits at around $63K TVL against ~$754K of bad debt. Recovery for affected depositors depends on arbitrageurs and external LPs choosing to seed it, on no defined timeline.
The sDOLA-long2 incident happened on 2026-03-02, two months ago. This proposal was posted two days ago. It allocates ~$1.14M of stranded L2 admin fees — which by design are DAO-revenue that would otherwise reach veCRV holders or the Treasury — to fully reimburse the 27 affected sDOLA-long2 borrowers ($822K target, $873K gross from the four largest chains).
Two months from incident to a fully-funded resolution proposal for one LlamaLend market. Seven months and counting on a parallel LlamaLend market on the same protocol, with a deployed recovery infrastructure that has no funding.
Two direct questions before this proposal moves to vote.
First: why does this post not mention the CRV-long LlamaLend market or Vote #1400 anywhere in its text? Both are documented, on-chain, and currently under-resolved. The recovery pool thread is at gov.curve.finance/t/…/11062. This proposal allocates ~$1.14M of common DAO-revenue without acknowledging that another LlamaLend market on the same protocol has comparable USD-scale loss and an existing recovery vehicle that lacks only seed funding.
Second: why does a market with an incident from two months ago receive a fully-scoped funding proposal from the same source, while a market that has been distressed for over half a year receives no allocation? If the answer is “the CRV-long pool is a separate workstream,” then this proposal should at minimum acknowledge that workstream exists and explain why the same source is not being shared. If the answer is “no one wrote a proposal for CRV-long,” then the question for the DAO is whether allocating $1.14M of common revenue to a single-market remediation is appropriate when a known parallel case is unfunded on the same protocol.
The argument that these cases differ in kind because one is an oracle exploit and the other is market drawdown does not hold up against precedent. Curve and Curve-adjacent compensation history is empirical:
- The Vyper compiler hack of December 2023 compensated affected LPs (depositors providing pool liquidity) with a 71.77M CRV vested grant.
- The Inverse Mills #57 / #305 / #345 series compensated anToken depositors after the Frontier oracle exploits.
- The June 2024 crvUSD-depeg vote compensated sUSDe LlamaLend borrowers — at $31K, the smallest case in the set.
Three of the four meaningful precedents went to capital providers, not borrowers. What they share is that the loss occurred through something the protocol shipped or a parameter the DAO set, not the actor class of the affected party. The CRV-long case fits this pattern. Soft-liq band parameters, the bad-debt resolution path, and the absence of automatic recovery infrastructure for distressed lending markets are all protocol-design choices made by the DAO. The “depositors took market risk knowingly” framing is post-hoc rationalization that does not map to how Curve has actually handled compensation when losses materialized on its own markets.
The infrastructure question is also already solved. Vote #1400 deployed the pool template seven months into the CRV-long incident. The mechanism is operational. What it lacks is exactly what this proposal is now solving for sDOLA-long2: a funded source that closes the gap between a recovery vehicle and capital actually flowing through it.
Two paths forward, before this proposal goes to vote.
Either amend the scope to include a parallel reimbursement contract for the CRV-long market, funded from the same source, that issues claim-receipts on future LP-shares of the existing recovery pool to affected depositors pro-rata to realized loss and routes a portion of the same fees into the pool as ongoing seed liquidity. The pool design from Vote #1400 stays exactly as built — direct payout is not a viable form for fungible-share holders anyway. But the pool gets a predictable funding source, and affected depositors get a bounded, pro-rata claim rather than an indefinite wait.
Or rescope this proposal as the first half of a two-part allocation, with an explicit commitment from @LlamaRisk or another DAO actor to put forward the parallel proposal for CRV-long on the same source, on a defined timeline, before either is voted on individually.
Treating one LlamaLend market with a fully-funded path while a parallel market with a longer-running, comparable-size loss has no source attached is not a position the DAO can credibly take if it wants depositor confidence on any future risk-collateral lending market.
Particularly interested in @LlamaRisk’s view on the scope question, and on how the framework principle — when Curve compensates affected parties on its own markets, and on what basis — should be addressed as a standing matter rather than per case.