Yearn Finance Part 2: Do people still claim rewards from yveCRV with the launch of yvBoost?
This is a 2-part series where I dive deep into Yearn vaults. This is part 2 where I look into the rewards claiming portion of the yveCRV vault. You can find Part 1 here.
What is yveCRV and yvBoost?
yveCRV and yvBoost are 2 distinct vaults in the Yearn finance family. The former allows users to deposit CRV and earn rewards in the form of Curve’s 3-pool LP (3Crv LP) which can be sold or restaked to increase one’s position. yvBoost on the other hand automates the restaking process. Instead of manually restaking every week, the vault automatically does that for you thus massively save you on fees.
Given that yvBoost saves users on fee for claiming and restaking, do users still claim manually in the yveCRV pool?
Number of claims
The first metric we can look for is how many claims are still happening before and after yvBoost launched. In the graph below, blue represents period of time before yvBoost while green represents after yvBoost’s launch.
We see that the first 2 months after yvBoost’s launch, we still see a high number of manual claiming before seeing a sharp decline in claims.
There are 2 hypothesis for this. One is that people still preferred selling their rewards on a weekly basis for cash flow as compared to continuously using the cash flow to increase their position.
Second hypothesis is that claiming behavior has halted in the recent months due to an increase in ETH prices. I’ll explore this hypothesis in the graph below.
This graph shows the number of traders who claim rewards in the yveCRV vault on a weekly basis and a line graph of ETH prices.
We see that although in the recent months of August and September where there are only a few traders while ETH prices soared, we cannot conclude that high gas prices are the sole factor in determining the number of traders who claim rewards. Look at May and June where high prices were also followed with high number of traders who claimed rewards.
However, what these 2 graphs tell is that the number of users who are manually claiming has significantly decreased in the recent months. It looks like yvBoost did reduce the number of manual claiming which can be seen 2 months after its launch.
Fees for claiming
The next metric to look at is the Fees in USD for claiming.
In the graph above, we can see that the monthly fees spent on claiming rewards has reduced ever since yvBoost launched. This is in line with our previous finding that the number of traders and claim transaction were reducing too.
Effiency of fee claiming
When it comes to claiming rewards, one must also take into account how much are the fees to claim them. To see if it’s worth claiming the rewards based on the fees charged, I took the fees spent for clamining divided by the amount of rewards claimed for each transaction and grouped them into buckets for counting.
In the graph above, ‘Between 1 - 20%’ means the fee that was paid to claim was between 1 - 20% of the total rewards claimed. Going by that logic, the higher the percentage, the less efficient it is to claim rewards.
If you go over 100% that means you are paying more fees than the rewards you are claiming - which is by the way, not cost efficient at all 😂. Surprisingly, there has been 70 transactions (about 8% of total transactions) that paid more fees than the value of the rewards.
The most common band seems to be the 1 - 20% group, which takes up 55% of total transactions, followed by less than 1% at 18% of total transactions.
This is purely non scientific but I would say that paying more than 20% of the transaction as fees does not feel good and might not be that cost efficient either. The number of transactions that paid more than 20% of rewards value in fees represent 27% of all transactions.
Paying fees for claiming rewards with 0 value
A peculiar incident I came across is that there has been transactions that are paying fees to claim zero rewards. I did not know that claming 0 rewards is possible but there has been 89 transactions doing so since the launch of yveCRV vault.
In the graph below, I plotted the number of users vs number of transactions that has paid for fees despite claiming rewards that have no value (USD 0) .
The only explanation that I can think of for the high number of transactions in Dec - Feb is that those are test transactions possibly from the dev to see if claiming rewards worked fine.
For my amusement I wanted to see how much fees were paid for these transactions.
To my surprise, a total of 1000 USD was spent in fees claiming 0 USD in rewards - not very cost efficient indeed.
Conclusion: There is a decrease in number of users and claims who manually claim from the yveCRV which can be seen about 2 months after yvBoost launched.
While I’m sure the launch of yvBoost is not the only reason, we do see a drop in the number of users, number of manual claim transactions and in claim fees in yveCRV in the recent months - especially 2 months after yvBoost was launched.
In terms of efficiency of rewards claimed based on the fees paid for claming, a large majority of 73% of all transactions paid >0 - 20% of the total rewards in fees. I would argue that paying above 20% isn’t really cost efficient; luckily only 27% transactions fall into this category.
Last but not least, there has been 70 transactions that paid more in fees than the value of the rewards they claimed (not the most ideal situation). Check your fees before paying yall!