There is a possible middle ground:
- Variable weekly issuance of YFI based on target yield.
- This issuance could be higher or lower depending on where the target yield sits relative to the market-wide yield (the opportunity cost of capital).
Issuance would be a function of target APR, VWAP of YFI in previous week, and weighted TVL in previous week.
In steady state, when target APR approximates market-wide APR, there will be less wasteful switching activity. Better experience for all will result.
Something to consider?
