# Department Treasury Vaults & Department Staking **URL:** \ **Category:** Vaults\ **Created:** [9 November 2020 23:42 UTC](https://gov.yearn.fi/t/department-treasury-vaults-department-staking/7864 "2020-11-09T23:42:37Z")\ **Posts on this page:** 9\ **Page:** 1
**Author:** ![mdesim01](https://avatars.discourse-cdn.com/v4/letter/m/e99b99/32.png) [@mdesim01](https://gov.yearn.fi/u/mdesim01)\ **Post date:** [9 November 2020 23:42 UTC](https://gov.yearn.fi/t/department-treasury-vaults-department-staking/7864/1 "2020-11-09T23:42:38Z")
**Summary** : This is a proposal to overhaul the current MultiSig scheme and replace it with a new Yearn Treasury Vault contract that periodically allocates a portion of protocol revenues to Department Treasury Vaults, controlled by Department stakers. **Abstract** : Replace Yearn Treasury Vault contract with a contract that periodically distributes a portion (currently a $500,000 reserve) to Department Treasury Vaults. The percentage allocation of YFI staked to each Department, through the Yearn Governance Interface, dictates the proportions of protocol revenues distributed to each Department’s individual Department Treasury Vault as operating capital. How each Department elects to utilize or distribute its own operating capital is left up to Department Governance, which is controlled by those YFI stakers who staked all or a portion of their YFI tokens to that given Department (or their Department Delegates). **Motivation** : Currently, the Yearn Treasury Vault sends protocol revenues to the Governance contract as profit for YFI stakers, after the Treasury Vault has accrued a $500,000 reserve. This proposal does not propose to change this function; what it does propose to change is how this $500,000 reserve is controlled. Currently, the $500,000 reserve is controlled by a MultiSig wallet with 9 signers (ychad) that are empowered to pay for various operational expenses, including contributor compensation and community grants. While the operational efficiencies of a MultiSig are difficult to understate, the obvious centralization of power and the lack of strong incentives for MultiSig signers to remain fully engaged in the protocol’s success remain problematic long-term. While the MultiSig scheme has worked out fine to date, over the long term, it is clear that some other more decentralized form of Governance needs to be created that still enables intelligent, efficient, and decisive capital deployment to promote long-term growth of the Yearn ecosystem. By introducing a system that allows Yearn Governance participants to allocate their YFI stake to Departments, we would, in essence, be creating a discipline-specific governance system with stakers (signers) that are incentivized to remain aligned with the Department’s success. **Specification** : If implemented, this YIP would lead to the following: - Create multiple new Treasury Vaults assigned to Departments, called Department Treasury Vaults - Replace Yearn Treasury Vault contract with a contract that periodically distributes a portion (currently a $500,000 reserve) to Department Treasury Vaults. - Modify Yearn Governance v2 to include an interface that allows for: - Allocate existing $500,000 reserve to Department Treasury Vaults controlled by Department Stakers **For** : Set up Departments (to be determined). Add functionality to Yearn Governance Portal that prompts YFI stakers to allocate their YFI stake to Departments and to self-delegate that Department stake or assign it to a Department Delegate. **Against** : Keep MultiSig (ychad) empowered, and wait for another idea to come along. _Poll ([view on site](https://gov.yearn.fi/t/department-treasury-vaults-department-staking/7864/1))_ ---
**Author:** ![banteg](https://dub1.discourse-cdn.com/flex013/user_avatar/gov.yearn.fi/banteg/32/3608_2.png) [@banteg](https://gov.yearn.fi/u/banteg)\ **Post date:** [10 November 2020 05:46 UTC](https://gov.yearn.fi/t/department-treasury-vaults-department-staking/7864/2 "2020-11-10T05:46:58Z")
Similar relevant idea from MakerDAO forums. > **[FlapperDistributor: A Way to Distribute System Surplus while Minimizing...](https://forum.makerdao.com/t/flapperdistributor-a-way-to-distribute-system-surplus-while-minimizing-governance/4591)** > > FlapperDistributor What? The current Flapper is responsible for auctioning and burning MKR when the system surplus exceeds the hump parameter. Once hump is met, any additional DAI entering the surplus is diverted to the Flapper and auctioned for... ---
**Author:** ![banteg](https://dub1.discourse-cdn.com/flex013/user_avatar/gov.yearn.fi/banteg/32/3608_2.png) [@banteg](https://gov.yearn.fi/u/banteg)\ **Post date:** [10 November 2020 05:52 UTC](https://gov.yearn.fi/t/department-treasury-vaults-department-staking/7864/3 "2020-11-10T05:52:17Z")
Thanks for the proposal, it’s quite interesting. One thing I’m concerned about is this could turn into a popularity contest between departments. Current Ops team has insight into different departments’ needs and progress, which might not be the case if you are not engaged 24/7. I don’t think decentralizing this more leads to a more efficient resource allocation. ---
**Author:** ![danielzak](https://avatars.discourse-cdn.com/v4/letter/d/e95f7d/32.png) [@danielzak](https://gov.yearn.fi/u/danielzak)\ **Post date:** [10 November 2020 09:09 UTC](https://gov.yearn.fi/t/department-treasury-vaults-department-staking/7864/4 "2020-11-10T09:09:09Z")
I’m voting against. Having said that, thank you for explaining your proposal in depth. A few days ago I [published](http://gov.yearn.fi/t/a-cohesive-strategic-framework-for-yearn/7782) some thoughts and suggestions in order to identify and form guiding principles for Yearn. One of the things I identified as a key area is efficient governance. My point is that there is a strong argument to keep complexity and coordination cost very low in governance. Keep it simple. When I read the proposal, it seems to add a lot of complexity and coordination cost. Therefore I’m against. From my post: `There is a tradeoff between speed and agility on one side and transparency and consensus on the other. The cost of coordination is high. Therefore one goal should be maximum autonomy and ownership to the smallest possible unit. This means that we should allow for personal ownership and responsibility to the largest extent, and keep most coordination tasks to small teams. When possible, decisions should be taken by the person closest to the action.` ---
**Author:** ![cryptouf](https://dub1.discourse-cdn.com/flex013/user_avatar/gov.yearn.fi/cryptouf/32/2049_2.png) [@cryptouf](https://gov.yearn.fi/u/cryptouf)\ **Post date:** [10 November 2020 09:25 UTC](https://gov.yearn.fi/t/department-treasury-vaults-department-staking/7864/5 "2020-11-10T09:25:48Z")
First of all, thank you! Your proposal is well written with good explanations. BUT ( there is a but^^). I’m also against, At least now. But we should definitely keep it somewhere. _ **Why ?** _ Because the protocol is still very young. We are not fully organised yet. Some core members are probably more organised and they have an overall view of what is happening in, what you call, Departments. But I think only a very limit number of contributors really know what is happening. I agree with @banteg . And to be honest I think we need something more organised at the moment. Like defining “leaders” for each department in order to better coordinate things. It’s happening, but again, everything is very new and we need time. So I think that we should keep the Treasury as it is for the moment, wait a few months and see. We need to build the protocol, a lot of new stuff are coming and we should probably focus on that first. Even if it’s not ideal, grants + fixed salary for contributors seem to work and we should keep it for a few months. Then when everything runs smoothly we can probably think about your proposal. ---
**Author:** ![banteg](https://dub1.discourse-cdn.com/flex013/user_avatar/gov.yearn.fi/banteg/32/3608_2.png) [@banteg](https://gov.yearn.fi/u/banteg)\ **Post date:** [10 November 2020 11:27 UTC](https://gov.yearn.fi/t/department-treasury-vaults-department-staking/7864/6 "2020-11-10T11:27:53Z")
What you describe about leaders and such is basically status quo. People had no problem self-organizing so far. There is forum, there is discord, there are like 35 telegram groups, all this has been working well. I don’t see value in more governance for the sake of more governance. ---
**Author:** ![sambacha](https://dub1.discourse-cdn.com/flex013/user_avatar/gov.yearn.fi/sambacha/32/1802_2.png) [@sambacha](https://gov.yearn.fi/u/sambacha)\ **Post date:** [10 November 2020 15:07 UTC](https://gov.yearn.fi/t/department-treasury-vaults-department-staking/7864/7 "2020-11-10T15:07:41Z")
nice try trojan horse, im on to youuuu ---
**Author:** ![mdesim01](https://avatars.discourse-cdn.com/v4/letter/m/e99b99/32.png) [@mdesim01](https://gov.yearn.fi/u/mdesim01)\ **Post date:** [10 November 2020 15:46 UTC](https://gov.yearn.fi/t/department-treasury-vaults-department-staking/7864/8 "2020-11-10T15:46:44Z")
Thanks for the thoughts! 1. I was unaware of the MakerDAO FlapperDistributor idea until you just brought it to my attention, but now having read through it, I certainly see the similarities between this idea and the FlapperDistributor idea (…and I think that LongForWisdom’s description of it is way more elegant than mine!) 2. I agree with you that this proposed system for allocating Yearn Treasury funds to Departments based on stake is at risk of turning into a popularity contest between Departments; however, I’d argue that the current system–that is, the MultiSig having full power over $500,000 Treasury reserve–is also a popularity contest, in the sense that, whoever is closest with the MultiSig signers is at a clear advantage. Furthermore, because the MultiSig signers have, thus far, remained the same since they’ve been empowered (with exception to the few that were swapped out in late August) and the majority of its 9 signers appear to be largely inactive within the Yearn community, I’m concerned that there is a lack of incentive alignment within the existing MultiSig. Of the 9 active MultiSig signers, on the surface, it appears that only 2 to 4 of them (certainly you and Klim, and maybe Substreight and devops199fan) are active and “up-to-speed” enough to make very well-informed decisions about capital allocation. With that said, if this proposal is not the answer (which, once again, I can absolutely see its downsides), I’d, at the very least, suggest that we find a way to improve activity/engagement of our MultiSig signers until a more solid Treasury Governance plan can be developed. For instance, maybe we can set up a regularly scheduled (weekly? monthly?) vote to re-elect MultiSig signers and swap out those who are inactive in the community, in order to maintain a greater level of checks and balances with regards to capital deployment. ---
**Author:** ![dudesahn](https://dub1.discourse-cdn.com/flex013/user_avatar/gov.yearn.fi/dudesahn/32/4350_2.png) [@dudesahn](https://gov.yearn.fi/u/dudesahn)\ **Post date:** [13 December 2020 15:22 UTC](https://gov.yearn.fi/t/department-treasury-vaults-department-staking/7864/9 "2020-12-13T15:22:01Z")