Traditional pension systems are deeply disappointing: people pay contributions for years, yet pension funds manage these assets inefficiently and bear no responsibility for the outcome. States raise the retirement age, and the accumulated sums remain virtually inaccessible to their holders, yielding only meager returns at life’s end. The money formally exists, but it's practically impossible to access it—turning pension income into an illusion.

As a result, savvy investors are increasingly opting out of state pensions in favor of personal savings and creating passive income sources. However, classic instruments—bank deposits, real estate, REITs, bonds, and dividend stocks—are also losing their appeal. These assets are centralized, overpriced, and returns on capital are declining.

In overheated markets and with low interest rates, these instruments tend to preserve capital rather than grow it; moreover, access is often territorially restricted, tightly controlled by third parties, and can be blocked by political or economic upheavals.

So what passive income instruments, free from these problems, exist today?

TABLE OF CONTENTS

• DeFi and Smart Contracts

• Curve Finance

• Birth of the “CRV-Pensioner”

• A Rational Choice

• P/E

• Additional Opportunities from Derivative (“Wrapped”) CRV Tokens:

• Detailed Breakdown

• Sources of Revenue

• Financial Sustainability

• Dividend History

• Regulatory Environment

• Debts

• Yield Comparison

• Why a High Rate in This Case Is Not a “Red Flag”

• Conclusion

• Read in the Next Parts

Smart-contract technologies are carrying out a silent revolution by creating autonomous solutions without intermediaries. This reduces costs and—crucially—solves the trust problem. Pioneers of these systems no longer see any alternatives for themselves in traditional finance, recognizing its limitations. TVL in DeFi doubled in 2024, exceeding $129 billion (focusonbusiness.eu).

Over nearly a decade of development, DeFi has proven its resilience. Protocols capable of stably generating real income and directing it to holders of governance tokens—much like dividend-paying companies—have emerged.

A striking example is Curve Finance. This DeFi pioneer, based on real revenue, has spawned an entire ecosystem of projects also focused on generating sustainable income.

Curve Finance is a decentralized protocol that enables passive income without intermediaries, bureaucracy, or geographical constraints. Instead of entrusting their capital to a state or bank, users manage it themselves—earning fees and “bribe” incentives from external participants. Income here comes from real on-protocol sources—swap fees and economic incentives—not from thin air.
This next-generation instrument creates passive income under open rules, is available to everyone, and does not depend on anyone else’s decisions.

Curve offers crypto-swap functionality, lending, and the issuance of the crvUSD stablecoin. Users can swap stablecoins and other cryptocurrencies with minimal fees and slippage, provide liquidity to pools and earn on it, or take out crvUSD loans collateralized by crypto assets like ETH or BTC.

The ecosystem’s key element is the CRV token. CRV holders can lock their tokens for 1 week up to 4 years in exchange for veCRV (vote-escrowed CRV). The longer the lock period, the more veCRV the user receives. veCRV holders gain governance rights, increased liquidity-provision rewards, and a share of protocol income—including swap fees and crvUSD revenue.

Thus, Curve Finance offers users a decentralized alternative to traditional financial instruments, with transparent rules and governance participation.

In decentralized finance (DeFi), you can lock CRV tokens and receive a share of Curve Finance’s weekly income. This revenue stream is analogous to dividends—but without bureaucracy and with transparent on-chain bookkeeping. The community calls those who receive these payments CRV-pensioners.

In short: A “CRV-Pensioner” is an investor who has converted (locked) their CRV into veCRV (directly or via wrappers such as vlCVX, sdCRV, yCRV, cvxCRV, etc.) and receives:

1. Swap fees from the Curve exchange

2. Interest from crvUSD lending

3. Bribes—payments from third-party projects for veCRV votes

Payouts arrive weekly, and the right to payouts is secured by smart contracts—no bureaucrat or bank can block it.

Viewed through the lens of old-school investing principles, Curve Finance presents a compelling picture.
Benjamin Graham believed a reliable asset should generate stable profits, regularly share them with investors, and not be overheated. Curve has done so for nearly 5 years without interruption.
Peter Lynch advised staying clear of overhyped “meme” assets and focusing on growth rates and business quality. Curve isn't merely growing—it’s becoming the DeFi ecosystem’s foundational infrastructure.

What's the bottom line?
Curve meets the criteria used by traditional investors when selecting dividend assets:

• P/E at the level of mature companies: ≈ 8.8. For comparison: PayPal — 14, JPMorgan — 12. Such a low multiple typically belongs to companies that have passed their main growth phase. Curve, by contrast, is still a relatively young project but shows high, stable income and enormous expansion potential.

• Financial sustainability: Profitable every year since launch.

• Dividend history: Stable smart-contract payouts since 2020.

• Yields above inflation: CRV-based strategies show 10 % to 50+ % APY.

• Stable sector: Curve serves the stablecoin market—the most liquid and least volatile DeFi segment—plus liquid pairs like Bitcoin/Ethereum with relatively low volatility.

Price/Earnings (P/E, earnings multiple) is a financial metric equal to the ratio of a company’s market value to its annual earnings per share.
Simply put: how many years of earnings a company needs to recoup the price paid by an investor.

Normalizing Curve Finance’s P/E

We calculate a normalized P/E by dividing total profits distributed to veCRV holders over the protocol’s full operation (~4.8 years). This approach smooths out crypto market bull/bear cycles and provides a more stable estimate than a trailing P/E, which uses only the last 12 months.

1. Total profits paid to veCRV holders since launch (August 12, 2020) ≈ $590 million (crvhub.com).

   

2. Divide by the protocol’s operating time through May 23, 2025—just under 4.8 years—to get an average annual profit ≈ $123 million (medium.com).

3. Current CRV market cap ≈ $1.08 billion (CoinMarketCap). Dividing gives 1.08 billion / 123 million ≈ 8.8. In other words, investors pay about $8.80 for each dollar of annual profit Curve actually distributes to veCRV holders.

   

On traditional markets, such a low multiple is typical of mature companies with decades of history—not a rapidly growing project—meaning Curve is currently undervalued relative to its earnings.

Curve’s ecosystem features wrappers—derivative tokens backed by CRV permanently locked in the veCRV contract. They offer enhanced liquidity or higher yields through better price/yield ratios. Wrappers provide Curve income but differ in payment structure and risk. A wrapper’s price tracks CRV but can deviate based on market conditions.

Two wrappers stand out for investors seeking alternatives to direct veCRV participation:

• vlCVX: Locked CVX whose value and income derive from bribe payments for Convex veCRV voting rights. Though it contains CVX internally, functionally it’s “packed access” to veCRV voting power and is treated as a CRV wrapper.

  

  CVX currently trades at a discount to CRV when adjusted for managed veCRV voting power, so its “effective” P/E is even better.

  

Wrappers carry de-peg risk. However, at times like now, that risk becomes an opportunity: temporary price deviations let you buy CRV at a discount via wrappers.
Importantly, although these derivatives can offer higher yields than direct veCRV investing, they are separate protocols with their own risks and characteristics.

• Swap fees. The protocol serves stablecoin and volatile crypto-pair pools. Each trade incurs fees, distributed weekly to veCRV holders.

• crvUSD lending. crvUSD lending markets collect interest on loans, which also goes to veCRV holders.

• External incentives (bribes). Third-party protocols pay for veCRV votes, adding significant extra yield.

All three sources are external: profits flow into the protocol from outside. This is a key distinction from schemes that generate “income” solely via token minting and promises.

Curve Finance has led decentralized exchanges since 2019. It earns revenue regardless of market direction—bull or bear—because the more volatility and assets trade on DEXs, the more fees it collects.

Since the first CRV lock on August 12, 2020, the protocol has continuously generated profits for its crypto-shareholders (etherscan.io). Even after the 2022 bear market, Curve remains the top stablecoin DEX by liquidity with total TVL ~$2.4 billion.

Data from crvhub.com show that, as of this writing, $590 million in profits have been distributed to investors in under 5 years. With yields ranging roughly from 9 % to 55 % APY—with an average yield of approximately 30 %—the statistics back it up:

In 2024–2025, the US and EU introduced bills defining DeFi as a form of licensable financial service. TradFi exchange aggregators are already implementing KYC bridges with blockchain; liquid-staking services are undergoing regulation. Curve—operating solely via smart contracts—falls under lighter “technology-neutral” rules.

Technology neutrality means financial services are regulated based on function and risk, not implementation technology. Under this approach, protocols like Curve are regulated for their service but aren’t subject to strict requirements meant for centralized intermediaries (e.g., licensing, custody, mandatory KYC), because they:

• Have no single controlling entity

• Don’t hold user funds

• Don’t control access to funds

Thus, Curve is likely to fall under a softer regulatory regime, despite offering similar functions to traditional financial intermediaries.
Technology neutrality ≠ full approval
Regulatory frameworks are still evolving, and legal-uncertainty risks remain.

Curve Finance has no debt—quite the opposite, the protocol maintains its own treasury fund managed by the DAO.

The S&P 500’s average dividend yield over the past five years hovered between 1.3 % and 1.7 % annually (Multpl), while US inflation averaged around 3.2 %–3.4 % (YCharts, Trading Economics). A traditional equity portfolio thus delivers negative real returns.

By comparison, Curve-based strategies (cvxCRV, yCRV, asdCRV, etc.) yield from 10% to 55%+ APY—a real premium 5–30× that of the S&P and a consistent outperformance of inflation.

In traditional finance, abnormally high yields often signal issuer unreliability, but in DeFi they mainly reflect informational and regulatory risk, as well as low investor awareness. The faster the market adapts and standardizes, the more “normal” rates will become—and today’s premium remains a reward for those willing to delve into the details and embrace the volatility of a new market.

1. Market inefficiency. Most traditional investors lack sufficient knowledge of DeFi’s potential and cannot accurately assess Curve’s prospects and risks, keeping yields elevated.

2. External cash flows. Curve’s revenue streams are genuinely external: swap fees, crvUSD lending interest, and bribes from protocols vying for Curve liquidity.

3. Regulatory uncertainty. The absence of unified DeFi regulations forces investors to price in a legal and compliance premium. Yet recent trends clearly point toward DeFi’s integration into the global financial system, which will reduce these risks.

Curve Finance demonstrates that decentralized protocols can provide stable income comparable to dividend assets in traditional finance—but with added advantages: transparency, automation, accessibility, and protection from external interference. High yields here are not the result of excessive risk, but of market inefficiency, low general awareness, and current regulatory quirks. As the industry matures and institutional participation grows, these opportunities may become less accessible, making the current period particularly interesting for analysis.

In the continuation of this series, we’ll dive into how to become a CRV-Pensioner in practice:

• How to lock CRV directly via veCRV

• How to use vlCVX as an alternative to direct ve locks

• How to employ liquid wrappers like sdCRV that retain veCRV functionality

• How payouts work and the risks of de-pegging and strategy selection

• How to choose the optimal path based on yield, liquidity, and desired involvement level

An analytical deep dive into one of DeFi’s most resilient mechanisms awaits—offering an alternative to the traditional financial system.

Note: Human-reviewed AI translation. Read the original article here.

Disclaimer
This material is provided for informational purposes only and does not constitute investment, financial, legal, or other professional advice. The author is not responsible for any losses resulting from the use of the information presented. Cryptocurrency markets are highly volatile and risky; consult a qualified professional before making investment decisions. All actions taken based on this material are at the reader’s own risk.