Governance Overhaul and Future Rewards

Proposals Vaults
63

Does this not just break the system to currently support these platforms but also expand to even more in the future. At what point will this stop? I am labeling this as this as VOTE FARMING. Once we do it every other “Y” fork or copy cat will follow our example and then you will have a bunch of Y votes flying everyone and everyones hands will be in each others pockets for greed.

Even if this doesn’t “theoritaclly” apply to yearn others will follow and we shall be creating another Farm voting bubble in which I don’t know how many or any projects will survive tbo.

If everyone cant farm for essentially free money anymore this all implodes, all the top engineers and brains will flee for fintechs and real organizations who will pay massive sums of real money. Everyone here is participating because it’s a beautiful project and it’s fun for everyone. Once those incentives are gone I can easily see yearn yes exploding in price initally but potentially dying or flatlining hard.

It would be very similar to a startup being acquired by another organization essentially and people will move on to to start new projects, which would actually be awesome in general as we need an evolving industry with new projects / startups. If we go down this road I feel as the everything will implode and we’ll destroy everything we have made.

Ask yourself, when will the tethering between farming and vote farming if this pasess will there be and how will it ever be stopped. No one will know what the hell is going on and not only do other systems fail but others as well.

Not trying to create fud or what you mind consider bs but think outside the box for one. If I was putting myself in Andre’s shoes I can easily see him just leaving to start a new organization / startup. In which he has every right too as he has given us a gift we need to manage properly. Why do you think he doesn’t want money, maybe he knows the LTV of this is something he built initially in his mind that others can take over and he’ll move on to do his own things as he just purely enjoys writing code and building things.

I know from first hand experience as being one of the first employees with shares of AdColony that Opera Media works purchased for $350m. Everyone moved onto higher salaries at different companies and some left to go with the original founder to help him as he created AppOnbard.

This is such a dangerous path I don’t think this has been fully thought through by everyone.

I don’t want to talk technical gargin but rather philosophical impacts of this.

if you don’t want to discuss this like adults then we will simply become just an extreme political organization. I’m sick of getting dm from people agreeing with me overall and not standing up for speaking for themselves.

I’ll leave it at there… If you want to dm thats all cool whatever. Just bring it here in public.

Btw you want to work with YFV and Dodo, CREAM, and Harvest. When does this maddness every end. You are going to be over farming then over vote farming just an endless loop of tethering in one direction with out realizing that tethering might come back and slap you in the face. Put that in a mathematical model please, every one in each others pockets.

And if you think there’s a way to stop it there wont be. People will just sell their keys on a black market…

3 Likes
64

Or just allow rewards to be withdrawn at any time (not necessarily within a 3 day window after voting).

65

Yup, though this does not incentivize people to actually vote.

Abstain at least forces a user to click into a proposal … though they may not bother to read it or try to form an opinion on it.

Though it’s likely a user who doesn’t care is just voting for either option without critical thought at this point.

1 Like
66

Agreed. But if someone is staked in the governance pool, is that not sufficient. People will have different levels of engagement with different proposals. Voting abstain to collect rewards seems unnecessary. It could also be limiting if there are no active proposals.

67

True. Right now is a good example of this.

68

Exchanges in general should be banned…

69

What do you mean, everyone should be allowed to vote… Even Coinbase and potentially institutional investors should be allowed
lmao :joy:

Is this a real conversation

70

I’ve been in the ecosystem since the first week and I don’t think allowing YFI that is deposited elsewhere is against the principal of governance. The core of yearn is a yield generating platform, the coin can be used both for governance and to yield farm. It is not mutually exclusive.

@banteg
I would support excluding centralized exchanges, only allowing YFI staked in governance to claim rewards, even though all YFI can vote, and some sort of time lock that magnifies rewards.

I think the 3rd point may need to be a separate proposal as it has more moving parts and probably needs to be discussed more.

@DCinvestor I was thinking there could be a weekly proposal that is just “Do you vote to be able to claim rewards”. This could satisfy the voting requirement to claim rewards.

2 Likes
71

Any concern here about a blackmarket being created eventually to sell private keys for voting with ygov or whatever token people are trying to make for voting. Once this starts every other clone or fork of any or everything of this nature will start adopting the same model. Everyones hands will be in each others pockets.

72

If we only allow staked YFI in gov to earn rewards than I am for this proposal.

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73

I’ll vote appropriately and let you guy stake the lead.

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74

I’ll this to you guys as I trust all of you.

75

These might not be a full list of all proposals but I will try to list out some of the thoughts here:

  1. Should YFI Holders be able to vote off-chain using Snapshot voting? - I think this is a one-off which is pretty easy to vote on separately from other topics.

  2. Should YFI Holders who are not staked in governance be allowed to vote? (with clear understanding that they will not receive staking-specific rewards if not staked in governance) - I would add that vaulting YFI on Yearn is a potentially separate question about whether or not vaulted YFI accounts should be included in this.

  3. IF YES on #2, should CEX accounts holding YFI be blacklisted from participation?

  4. IF YES on #2, to avoid double voting, should YFI being used in lending protocols be excluded?

  5. If NO on #4 (YFI used in lending protocols are not excluded) should holders programmatically receive reduced voting privileges? (assuming this is technically feasible)

  6. Should we enable a time-release vote lock token (gYFI) that is given as a reward to participants who lock into voting? - this could also be a one-off, although reward distribution to non-governance holders could be tricky so this also might be dependent on #2.

7. If #6 (gYFI or similar) should this token be transferrable?

8. Are other reward structures better than a token, such as reward distribution or voting power increases/decreases with time? (This is an open-ended question that I think requires further discussion with respect to a list of options.)

Keep in mind this is not a full list but perhaps starts off the conversation of governance and rewards systems for governance.

4 Likes
76

I think you have this backwards. If YES on #4 then as written, YFI on lending protocols would be excluded.

77

You may be missing some here. For example, there have been discussions about vote and/or reward power increasing or decreasing over time, and these options may have nothing to do with a gYFI token.

Also, with respect to a potential gYFI token, there was discussion as to whether this would be transferable or non-transferable.

78

I modified the structure a little. This topic is kind of a logic wormhole that doesn’t capture every talking point. I can’t speak to every opinion, and I think perhaps we should answer some questions first before delving into others.

However, feel free to add feedback as you see fit.

1 Like
79

My opinions:

  1. Gasless voting is excellent. So happy that we’re doing this. If possible, like @DCinvestor has lobbied for, I think an “abstain” option would be worthwhile.

  2. As I’ve discussed before on previous posts, I think gYFI is a good idea. Again, I think we should always be incentivizing those who are actually participating in governance and who are using the YFI token to do so. Having time-weighted votes does this.

  3. Replacing yCRV rewards with yUSD is an improvement. However, after a lot of thought, I believe we should distribute YFI as rewards to governance stakers in place of yUSD. I know this is controversial, and I used to be against it. But the reason I am for it is not to support YFI price with buying pressure, but instead to put more YFI in the hands of those who are voting and governing the protocol. It is a token meant for governance, and therefore I believe it makes total sense to concentrate it in the hands of those who are actively participating in governance.

  4. In terms of voting– while I do like the idea of as many YFI holders as possible being able to participate in governance, I definitely don’t like the idea of it double-counting. I think it’s still cleanest to only count YFI that are staked for governance votes. I also think that we should ban centralized exchanges as well. If we did allow YFI outside of the protocol to vote, then I think gYFI becomes even more important, because it will help to weight more heavily the votes of those who are passing up potential yield to secure the governance of the protocol.

  5. Whether or not to give rewards to non-stakers I think is pretty easy. If someone wants governance rewards, they should stake in the protocol. If we did distribute governance to tokens outside staking, then we would also be incentivizing double-voting/staking by doing so.

9 Likes
80

I agree. We need to keep voting and governance simple and clean. Trying to catch all the corner cases of letting people who lend their YFI or use it for liquidity vote will just be a nightmare to organize and communicate.

If you want to participate in governance, you should make a commitment. I don’t want people taking out giant YFI flash loans to time the snapshot, just to vote maliciously.

5 Likes
81

Okay, so I’ve read through the entire thread and tried to sum up both the actual issues but also general sentiment and which ones may be worth grouping/voting on, like @banteg suggested. @waif79 has done a decent job of this, but I will attempt to add some clarity and make actionable items a bit simpler.

If you want the TL;DR, just skip to the end where I have the suggested YIPs separated out.

Gasless Voting

  1. Should we enable off-chain, gasless voting?
  • Responses seemed to be overwhelmingly yes, with only one person pushing for staying with true on-chain voting. Many mentioned gasless voting would increase participation of smaller holders/stakers. The only other issue brought up was the issue of an “abstain” option by both @DCinvestor and myself. While I think this is a good add and I don’t see any reasons not to add it, it’s not critical at this time.

Voting/Rewards Outside of Governance

  1. Should we allow YFI not staked in governance to vote?
  • Responses to this were very mixed. In general, members were against this. Many offered caveats where they would accept this, such as decreasing voting power in lending protocols by the percentage of YFI that is borrowed out, while some didn’t want to count lending protocol YFI at all. Sentiment seemed to be more welcoming to allowing yYFI to vote in some capacity, although this would perhaps only be if the yYFI strategy didn’t involve lending or if the voting power were still less than staked YFI.
  1. Should YFI not staked in governance receive rewards?
  • Response was clear, rewards should only go to those staking in governance. Many mentioned the opportunity cost of staking in governance vs seeking higher yield elsewhere.
  1. Should CEXs be allowed to vote in governance?
  • Sentiment was negative against this as well. Users did mention if CEXs were able to create a transparent voting portal, then this may be more acceptable, but many worried about CEXs voting with YFI stored on their exchange. A time-lock with gYFI was also mentioned as another mitigating solution for this. In general, many wanted all non-staked YFI barred from voting.

Vote-Locking/gYFI

  1. Should YFI implement a gYFI system with time-weighted vote locking?
  • Sentiment for this was incredibly positive. Posters seem strongly in favor of increasing voting power, perhaps also increasing rewards as well.
  1. Should gYFI be transferrable?
  • This was controversial. Several posters mentioned they felt transferring gYFI went against the reasons behind locking it up in the first place. @andy8052 mentioned that if it wasn’t transferrable, someone could easily wrap it themselves to allow it to be transferred. An interesting idea that was also brought up by @Beepidibop is to instead regularly take snapshots and calculate a weighted average that way of time YFI held in protocol. This would help avoid gaming of the gYFI that would (very possibly) occur.

Rewards

  1. Should stakers receive rewards in yUSD instead of yCRV?
  • This actually wasn’t really mentioned by many posters here. Those who did (myself and @Wassupdude) both brought up instead making the payments in YFI. To be brief, I think it makes sense to reward those who vote in governance with the governance token– plain and simple. But I also believe yUSD is an improvement over yCRV, especially for small voters, as they are earning more interest as it sits before claiming.

So, moving forward, I think we should divide up into the following votes/YIPs:

Should we move to off-chain voting with Snapshot?

  • The most important, and I would say the easiest yes.

Should we allow YFI not staked in governance to vote?

  • While I am uncertain this will pass in the first place, if we want to have specifics for the vote– I would suggest a small set of whitelisted protocols (Aave, CREAM, Balancer, Uniswap, YFI Vault), and for the lending protocols, assign votes proportionally to how much YFI is remaining in the protocol– so if 75% of the YFI is left in Aave with 25% borrowed, then those aYFI have 75% of their normal voting power. CEXs would be banned for now, which we could perhaps revisit in the future if they built voting portals with lockups.

Should we implement a gYFI system with time-weighted vote locking?

  • If this passes, then we can decide on mechanism of vote power increase, how rewards are boosted, and also whether it is transferrable or not. In general, it seems most posters are in favor of this behaving in a very similar method to Curve’s veCRV system. If we wanted to start with that as the default model and then make tweaks, I think that would likely have strong support.

Should we implement yUSD rewards in place of yCRV?

  • I will again argue here for YFI (it got 66% support here), but I do think yUSD is a great option as well, and it seems YFI rewards likely never got enough traction with the team to move forward.

That’s what I’ve got. @banteg, if you’d like help writing up any of these YIPs just let me know and I’m happy to do so.

21 Likes
82

This is a great summary. Thanks @dudesahn

Before putting a gYFI proposal to a vote, we should flesh this out more. For example, as you mention, it may be that snapshots could work for measuring time in governance such that neither a gYFI token nor a gYFI lock (like Curve) is necessary.

1 Like