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How has the introduction of the yvBOOST Vault impacted usage of the yveCRV Vault?
Introduction
On 6th February 2021, Yearn Finance launched yveCRV. yveCRV is the Yearn Vault for vote-escrow Curve DAO tokens, which means that the vault takes CRV and deposits it into vote-escrow, minting veCRV in return.
Although irreversible, veCRV holders earn a portion of Curve Platform fees, weekly. Based on this premise, yveCRV is able to generate a weekly yield for depositors.
On April 30th,2021, Yearn announced yvBOOST, a vault which holds yveCRV. The rewards earned from yveCRV are sold for CRV and deposited back into the vault, inherently increasing yveCRV balance.
The main advantage of yvBOOST over yveCRV is that token owners gain weekly compounding long exposure to Curve platform incentives.
After months of yveCRV and yvBOOST running side by side, we are set to find how the introduction of yvBOOST has impacted yveCRV.
The first green peak in the graph represents deposits made into yveCRV on February 6, 2021, the day year.finance announced yveCRV. Daily deposits then moved in a downward trend although with some activity.
The yellow represents yvBOOST deposits. The highest peak, which is on April 30, 2021, was the day yearn.financed announced the vault to the general public. Since then, there have been some deposits in yveCRV but they are no match for the peaks we see in yvBOOST deposits.
Since June 8, 2021, yveCRV deposits have not risen past 200K. This is in comparison to its ATH of 500K.
Findings & Conclusion
It was found that yveCRV deposits have reduced since June 8, 2021, about a month after yvBOOST launch. This may be due to yvBOOST's superiority in compounding exposure to curve incentives. Moreover, yearn.finance explicitly states on the yveCRV interface that users should consider the more powerful yvBOOST vault instead of yveCRV.
In a nutshell, the introduction of the yvBOOST vault has reduced deposits into the yveCRV vault.