I think combatting yfi yield seeking will be vary vary hard. People want to get paid for the assets they hold YFI is no different. No notice or msg on the website will stop this.
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Iām not referring to a notice or message, Iām referring to stats. Assuming the data can be collected, which Iām confident it can, I believe we can construct a clear picture of what benefit current holders receive and thus, as those benefits grow in monetary value, so does incentive to stick around, opposed to running between schemes.
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Thanks for the discussion, all! It looks like weāre at 62 - 25 in favor vs opposed (ignoring the apathy votes). So over 2x as many voters want this proposal than donāt want it. However, the Opposed percentage has been increasing.
Granted, user count is only one metric, what really matters is the voting weights.
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Creating additional buy pressure for YFI is appealing, but I think there might be strategic benefit to using a separate non-governance asset like yCRV for rewards. Perhaps we could give individual governance stakers the option of automatically reinvesting the yCRV into YFI.
One of the main reasons I suggest this is that yCRV is non-essential to the security of Yearn. Iām not the only one who is concerned about the systemic risk presented by the trend of farming platforms popping up, like Yam, Cream, et al, which invite us to stake our YFI and expose it to the dangers of third-party platforms.
We often wonāt be able to compete with their introductory APY, so potential governance stakers may opt to continually farm Yams, Spaghetti, or whatever the flavor of the week is. But a hack or bug could result in the loss of a significant portion of circulating YFI, with disastrous consequences. We should encourage the use of yCRV for such ventures by putting more of it in the hands of YFI holders. I think that this, plus the opportunity cost of lost rewards from governance staking, would reduce the appeal of staking YFI outside the governance pool and steer third-party platforms toward soliciting yCRV instead.
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I MUCH prefer this idea: [quote=āblackcoffee, post:25, topic:2601ā]
Perhaps we could give individual governance stakers the option of automatically reinvesting the yCRV into YFI.
[/quote]
This also future proofs the distribution mechanism as this approach will likely deplete all YFI on the market at some stage in the future.
It allows those in forums seeking a way to āfarmā more YFI to do so (in a manner of speaking) by directly supporting the communities efforts.
Lastly. Iād note the rewards may be small now, but I suspect the will become considerable as the ecosystem grows beyond just the immediate crypto farming community.
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Now that we have a YFI vault, can we put this proposal to rest?
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opposed
If you want YFI rewards, put your YFI in the yYFI vault
There is also another implication here and that is tax
If you received YFI as a reward, that becomes income straight up. Meaning if your reward is say 1 YFI in fees then that would equal around $12000 of income at current prices that you would have to declare.
Now if worse case happened, and YFI price collapsed and stayed low, you sell YFI and lock in a capital loss. The thing is, capital losses can only be used to offset capital gains. Your YFI rewards were income. You still have to pay tax on the $12000 but now your YFI is worthless so you wont have $$$ to pay your tax bill.
Getting gov rewards in yCRV or yUSD is much better as it mimics a stablecoin ie $1. There is less risk of it losing value over time.
See this link for more info https://tokentax.co/guides/defi-crypto-tax/#defi-governance-and-incentive-token-taxes
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@mattdw Ben has an interesting point in this tweet: https://twitter.com/JLHeartsCrypto/status/1297954457284640768?s=19
Buying and burning YFI might be better for tax purpose, YFI whales might be up for that.
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I like the idea of buying and burning yfi.
However, the benefits of doing that will share across all yfi owners, not just the yfi stakers.
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Agree with you, gov should also be attractive for the ones that want to stake long term. YFI as rewards is the best possibility. not possible to start a YIP?
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While burning YFI might be a better choice for those under US jurisdiction, it isnāt necessarily optimal for other communities. Iām sure US citizens constitute a significant share of the user/holder base but I think we should still keep that in mind.
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We could also consider a split of the funds for a compromiseā¦ 1-50% to buybacks/burn for tax efficiency and price appreciation and leaving the remainder as it is now as effectively dividends. What do you guys think?
Iām for it, but a simple toggle in the staking dashboard, would let people choose whether to receive rewards in yCRV or YFI - no need to hardcode it in.
I prefer this option over putting in yvault, because of the lockup and exit fees.
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I agree with this. If itās possible for each person to choose, that would be ideal. Is this something realistic? Iām not a coder
ycry+yfi or other yderivatives , it is fine.
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