@southseacompany on Discord outlined how this could lead to a levered governance attack with sufficient funds, as one could deposit into YFI vault → get yYFI → borrow more YFI from CREAM-> deposit into vault → get yYFI which essentially leads to an arms race of borrowing as enough control could lead to an attack on the system itself, since others would be inclined to do the same to “keep up”. Whereas maintaining YFI governance as is means that once YFI is locked up in governance there is no more “available” external YFI to be voted with even “virtually” if that makes sense. How it would play out regarding rates remains to be seen but I think it’s an attack vector that would need to be taken into heavy consideration. In addition to allowing yYFI and YFI to vote, you have also increased the “voting supply” unless I’m looking at this incorrectly.
Other possible ideas to allow YFI to be used as working capital while remaining locked in the voting contract include
"I believe (haven’t made my mind up) I am opposed to making YFI too easily available on lending markets where it can be borrowed (and therefore adversarial attacked), however I do think it could be working capital in some way or form. Whether this is in the governance contract itself generating stablecoins via MKR (if/when available though I don’t like secondary platform risk especially if it means liquidation - Update 9/17 looks like this might be happening see: ,MIP10c3-SP10 Proposal: YFIUSD Oracle (Collateral Onboarding Oracle Assessment) - Collateral Onboarding Domain Work - The Maker Forum which also mitigates liquidation risk ) or something more native to the yearn ecosystem itself. Monetizing yCRV cashflow via centrifuge tinlake style systems at some point in the future? The ideal goal would be once the YFI are inside governance there is limited exposure to the “outside” for exploitation.
Not married to this but I think the YFI vault itself should be discouraged (for safety reasons - governance hijacking) and the way to do so would be to make it so that the rewards elsewhere (in this case, governance) are more appealing which keeps things simple"