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Thank you for the reply and participation
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This proposal originated when I was trying to design a strategy including some form of delegation, since it was not competent with the best vault strategy sometimes, I started to look into fee structure more deeply. Although the strategy did not develop in its original form for some other fundamental problem, the fee structure concern remained with me.
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My current concern is more about the sustainability. I prefer my efforts go to a place where all corners has got attention as much as possible, so if community decides the current fee structure for delegated vaults is good enough (for example for investors not to leave), I am ok with it; it may also be in my favor as a potential strategist, my doubt is about long term performance.
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Another point is that, I want to insist the current proposal voting is NOT about strategist fee or management fee, it is just about vault fee, although we may have discussions about them.
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For a system, from the user point of view we can have two extremes:
- We can have justified costs up to the point, user benefits start to drop and they start leaving.
- We can start to pressure system itself in the direction of user benefits, until it starts to collapse.
I think the second one has strong supporters, I do not want any collapse, just mentioning the extremes.
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A view from an investor could be that, (s)he says: “I will look at Yearn as black box which takes my assets, generates yields, takes 20% of it, gives me the rest. Yearn is free to rotate my assets as much as required inside its system.”
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I think the current fee structure for delegated vaults is not consistent with what is described here, at least I can not find any difference between delegated and normal vaults (seems just an unanswered question). Also the point mentioned in the reply (“The Strategy author could just as easily cut out the middle man of depositing into another Vault …”) shows that it is a probably good assumption to think the share of fees could be the original 20% and not increased if the path for vault generation becomes longer.
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Another point which comes to my mind (although not to be an issue now and even never): Let’s assume there will be some buffer strategies which if inserted will just pass the funds to the next vault, but take a portion of yield when yield is back propagated. If we fit everything in that 20%, it is an auto-control mechanism for such insertions, but if it is allowed for every insertion to take its 20%, the internal control just relies on the open source and deployment reviews.
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About the mentioned points
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I think the difference between delegated strategies and vault is also apparent from my original post, I prefer the term “delegated vaults” originally used in yearn medium post where ever it does not produce disambiguation.
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I also think strategists should be compensated enough for the system to work properly. Although the voting here is not about the strategists’ share of fees, trying to fit everything inside the 20%, will probably act as feedback mechanism which will make some strategies not profitable enough and push the efforts and resources to something more profitable.
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I agree that the cost of system should be covered by its revenue. One of the factors affecting the reduced vault fee by this proposal, is the amount of delegation in entire system, which I guess should not be high (Although cover of the costs may be possible independent of vault fees according to the next paragraph).
Although it is good assumption to think the numbers has probably somehow changed from this report, my understanding of management fee being 2% of TVL mentioned in 5, will easily cover the costs mentioned in page 7 of the report with a good margin.
Actually my mention of 0 in the voting, is to make it easier to vote. Since my understanding of the correct poll to post is a [“For”, “Against”] one and this may have already made decision making somehow complex (The “part 1” in the title, other parts may come), I have tried to merge the two polls of 1- Making vault fees configurable for each strategy and 2- Making vault fees 0 for delegated strategies, to one poll. We can revise the second one and define acceptable levels for negligible (0) vault fees for delegated strategies in further steps. I think 0 is fine for now according to my previous reasoning. -
Although I should study more what has been mentioned here, the choice of changing system parameters for the benefit of some, remembers me of the early days of ethereum which did something similar and created a fork. Although I was not happy with the change and I think nothing similar has happened again in ethereum, it is now successful. I think a system should not create such exceptions.
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About the increased deposits and decrease yields, I am not sure if by investment of I, the yield is Y, by investment of 2I, even Y is not possible (2Y may not be possible, but I think Y should be; I think we have also some capacity limitations implemented here, the distribution for delegated vaults maybe something which may need attention). The TVL amount and investors not leaving, may be a sign of not a good competitor existing yet. A benefit of doing the right thing (is this proposal about?), is building trust which in the presence of good competitors will help the system.
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About the proposed way out of the proposal, I agree, the problem of distribution of what to who, may be hard in lot of cases, but I do not prefer to look at my current proposal as a question about “we have some extra fees here, why should not we spend it for the sake of Yearn’s benefit” instead of thinking it about “whether or not delegated vaults should be made similar to other vaults as much as possible”
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Update 1: It seems in replying to point 3, I have compared something quarterly (the report) with something yearly (the 2% management fee), although this should be corrected, because of the high margin, it has no effect on the result.