CLever Improvement Proposal 01: Restructure delegation of CVX in CLever to increase yields and maximize CVX governance participation

(Posted on behalf of the CLever/Aladdin team)

The CLever team proposes revoking CVX governance power from Votium and taking over CLever gauge voting in-house in order to increase yields via fee savings and voting optimization. Gauge voting will be performed by the team using an algorithm we have developed which shows consistently enhanced bribe yields in backtesting.

With delegation to Votium revoked, non-gauge governance power of CVX in CLever will be allocated to veCLEV holders. Since non-gauge governance is not currently exercised by CLever CVX depositors at all, this change will not functionally affect the experience of CLever CVX users in any way other than to increase their yields. We do not propose any change to CLever’s fee structure at this time.

Since the launch of CLever, all CVX governance power has been delegated to Votium for maximum bribe yields. At the time of launch we indicated that delegation to Votium would be used as the initial approach, and since then the CLever team has been working on ways to improve bribe yields. To this end we have developed an algorithm which can be used to vote for maximum bribe yields in-house, without delegation to Votium.

The algorithm is ready for deployment and CLever now has sufficient CVX under management to justify making the change and performing the additional work of voting. Backtests show that our new algorithm would have produced 5-9% higher overall yields (see backtesting table below) in each epoch than the current strategy of delegating to Votium. The relative yield improvement can vary, especially if Votium’s strategy for delegators changes, so the team will continue to monitor and optimize the CLever strategy to ensure maximum bribe returns for CLever CVX.

Non-gauge governance power of CVX in CLever is currently not exercised because all voting power is delegated to Votium. Under the status quo, CLever CVX users voluntarily relinquish this aspect of their CVX governance power when they deposit. Once Votium delegation is revoked, CVX in CLever can be used to participate in these votes and we propose to vest that responsibility in veCLEV. This structure will help maintain the focus of the CLever product on set-and-forget yield enhancement while increasing CVX governance participation.

In practice this will mean snapshots mirroring non-gauge votes on Convex will be launched for veCLEV holders with results used to proportionally vote on the original Convex snapshot with all of the CVX under management. This is analogous to the way that governance power of veCRV in Convex is vested in CVX, except in CLever’s case the underlying token can be unlocked and withdrawn. This makes the governance power transfer quite low-stakes since it is reversible for each individual user simply by withdrawing.

Algorithm Backtesting

See backtesting results for the most recent 10 epochs below, comparing CLever’s voting algorithm strategy simulated yields to actual yields produced by Votium’s delegation strategy.

Round Total Delegated vlCVX Votium Delegation Yield CLever Algorithm Simulated Yield Improvement
30 $17,154,251 $971,873 $1,053,448 8.4%
31 $16,437,745 $699,858 $755,676 8.0%
32 $16,720,807 $658,899 $715,381 8.6%
33 $16,086,204 $653,021 $704,224 7.8%
34 $17,698,965 $602,265 $653,438 8.5%
35 $16,717,438 $680,960 $720,834 5.9%
36 $16,875,286 $916,955 $970,975 5.9%
37 $17,793,597 $1,175,760 $1,259,227 7.1%
38 $16,408,621 $1,078,126 $1,134,801 5.3%
39 $17,123,999 $928,529 $991,977 6.8%

Delegation Structure

The CLever multisig will (revocably) delegate voting power to an EOA wallet controlled by the team which will be used to manually execute the votes in line with algorithm output. It is necessary to do this outside the multisig because the delay imposed and co-ordination required to execute this via the multisig directly is incompatible with the timelines required to execute the votes.

Proposal Voting

A snapshot proposal will be posted for CLever CVX depositors to vote on. This is somewhat unusual, since the voters are not the usual governors (veCLEV) but rather the users of the platform, so the team will try to highlight this in communications to get the best participation possible.

Please comment below if you have thoughts, concerns, or proposed changes!

Informal Pool

  • Yes, I support this change
  • No, I want to continue using Votium

0 voters


I am absolutely in favor of this proposal for two reasons:

  1. I like more birbs rather than less birbs
  2. The killer application of CLever is its dominating aggregation of governance power through the use of clevCVX and the Furnace. The current ratio of vlCVX:veCLEV is 2,162,766:126,916…this is equivalent to 1 veCLEV having the governance power of 17 vlCVX. This means that veCLEV holders will now have a monumental say in the outcome of Convex’s future, and by proxy, Curve Finance and Frax Finance’s future. This is a massive responsibility and gift for all of us early enough to be here to take part in it. I am so proud of the community that has been cultivated thus far and feel like this team and veCLEV holders are absolutely ready to take this step to be key governance players in the Flywheel ecosystem. LFG!

One question: I know that for Curve gauge votes, the veCRV voting window is 7 days, and the vlCVX voting window is 3 days. Do we see veCLEV having something like ~3 days as well for Curve gauge votes? Just wanting to know for my own curiosity.

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