TL;DR
- Incentives for hyUSD/eUSD (Aerodrome) and dgnETH/ETH+ (Curve) will be phased out over separate timelines
- hyUSD/eUSD: three-week wind-down starting today
- dgnETH/ETH+: phased reductions beginning November 13 and concluding December 11
- Incentives will be reallocated toward LCAP and other Index DTFs
- LPs are encouraged to gradually exit or reallocate during each phase
Rationale
The liquidity in these pools has primarily been sustained by incentives directed via ABC Labs’ governance power on Curve and Aerodrome.
While these pools have served their purpose, the tokens haven’t yet achieved product-market fit — meaning their TVL growth depends almost entirely on continued emissions rather than organic demand.
To ensure long-term sustainability, incentives will be redirected toward tokens and DTFs with stronger potential for independent growth, including CF Large Cap Index (LCAP) and upcoming DTFs. Concentrating emissions in these areas allows the ecosystem to support assets with higher retention and compounding effects over time.
Additionally, maintaining the dgnETH pool has proven operationally demanding, with frequent community support overhead. Redirecting resources will free up bandwidth for new initiatives that deliver more consistent value to users.
Implementation plan
hyUSD/eUSD (Aerodrome)
- October 22: 50% reduction in emissions
- October 30: Additional 50% reduction (25% of overall)
- November 13: Final reduction to zero
dgnETH/ETH+ (Curve)
- November 6: Vote submission for emissions adjustment
- November 13: First 50% reduction
- November 27: Additional 50% reduction (25% of overall)
- December 11: Final reduction to zero
This staggered approach gives LPs ample time to exit or rebalance positions smoothly, minimizing slippage and market impact.
Looking ahead
The goal of this change is to focus emissions on scalable, composable products that advance decentralized index adoption across the Reserve ecosystem, and LCAP and other Index DTFs represent the next phase of this growth.
We appreciate the liquidity providers who’ve supported hyUSD/eUSD and dgnETH/ETH+, and invite them to participate in the evolution toward a more sustainable and robust Reserve ecosystem.