Very strongly against this. This would be the equivalent of Bitcoin setting aside a portion of its profits to give to Bitcoin Cash for “helping grow the community”. The irony is palpable.
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I would support working with legitimate projects like Aave, Compound, SNX, MakerDAO etc. but would strongly advise against any integration of ponzi copypasta palagarism pools YFII, YYYY, ZZZ, YFFI or whatever. One of these will blow up and we cannot risk blowback.
Every governance decision should be taken exclusively to our advantage, and to the advantage of legitimate DeFi service providers. That is a working together I can support.
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Fundamentally it’s additive not dilutive for value accrual back to YFI holders - as long as it’s governed properly, criteria for qualification like burning mint keys etc, then it accelerates adoption and localisation in different countries and languages, which is a huge barrier in crypto for most projects - would help yCRV scale massively.
Think of YFI like the BIS (central bank of central banks) for distributing Eurodollars, which is what yCRV really is: https://twitter.com/iammichaelpole/status/1289515281157505030
This should be the narrative and value prop, and if we don’t do it someone else will.
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If we want to be the BIS of DeFi, then we need to offer assets on a reputable basket of currencies.
In my view, ponzi pools YFII, YFFI, ZZZZ, YYYY are not eligible, since they expose reputation risk. We benefit very little by offering services which utilise or incentivize these tokens.
Determining eligibility in the interest of YFI stakeholders is where a multisig allocation and formalization of DAO structuring for yearn can be useful.
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Yfi and bitcoin are very different…yfi is a governance and incentive token…yfi can can do more…comparing it to bicoin is limiting its potential…
Collaboration vs Competition.
I’m in for collaboration.
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yes the reputation risk needs to be carefully addressed…by a focused team…there needs to be multiple audits…but at the end of the day profit sharing with legitimate pools of capital is a good thing…
I think you are too generous Andre.
I am in China. Most professionals use English fine and are part of the forefront of crypto community regardless of language. Access to Chinese language communities should not be a justification.
China became the world centre of BTC mining without any special push for Chinese language use.
Perhaps I am not party to the early stages of YFII, but from what I see it looks like shameless plagiarism. This is not because it is Chinese and culturally expected - and I find it depressing that is the expectation of how Chinese do things. It is because they are amateur, have taken shortcuts, and not meeting professional expectations.
I would not support.
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Yes you are right…i also support something similar
I’m all for collaboration. As long as these AUM providers are properly vetted by community governance, maybe through some sort of a whitelisting process, and YFI holders can determine the allocation parameters, then I think this makes a lot of sense. It wouldn’t be too dissimilar from Balancer’s reward distribution and incentive mechanisms. If YFI and yEarn can be the umbrella for all other AUM providers by welcoming them into the ecosystem, then that strengthens the ecosystem as a whole. It also allows for the potential of an unconquerable moat.
Going further, I’d eventually like to see a way to roll these other communities up into YFI, through some sort of a time-locking or vesting process.
I’m just spitballing here but maybe holders of whitelisted governance tokens could stake them into yVaults to participate in yEarn rewards while abandoning their own governance, and as an additional incentive for leaving behind their voting power, the yVault strategy could include a way to sell off their governance tokens in exchange for time-locked YFI. ySwap could be used to facilitate these transactions adding more rewards for participants and YFI holders. This could have 2nd order effects, so implementing something like this warrants lots of discussion and modeling, but I think it could be interesting.
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Counter opinion: YFII is a scam coin that burned its governance and serves no purpose other than to pump and dump. Change my mind.
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the question is why are they forking and what is the purpose of YFII?
I would rather welcome YFII people to join the YFI community because guess what? You get those yields if you’re in THIS community
Honestly I dont know enough about YFII specifically to make a call on the motives of the team…all im focused is how can we grow YFI to be the best and strongest community that it can be. My wish is for YFI to stay on top of the food chain…and incorporate outsider innovation so we can grow faster than any other project…now what innnovation YFII brings…that is not clear yet…but its been only 2 weeks!! Lets wait and evaluate…in the mean time we should keep an open stance and explore revenue share opportunities with them…as they are bringing in new capital to the ecosystem…I hope we dont become too defensive as a community…trust me we wont stay at the top of the food chain for long with that attitude…imho
Alright, I’m starting to see where you are coming from. My primary concern is similar to others in this thread; that we will be legitimizing projects that are potentially (and in my opinion likely) scams. I suppose looking at it on a project by project basis makes more sense than a blanket policy one way or the other.
All these yield optimizers are essentially competing for the same pool of Capital. YFI could definitely directly try to capture as much capital as possible from every market . At the same time, it seems like YFII has been able to mobilize China $ much faster than we would be able to otherwise so I think why not in essence implement a referral/affiliate program where we pay them a little for bringing YFI more AUM.
We will in effect be building a MLM where YFI is at the top and the smaller clones help YFI by doing what they are good at - mobilizing capital.
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Do you think YFII is sustainable even if we give it some fees? It already seems to be entering a death spiral, especially since it’s first halving is coming up. It’s true that it got a lot of traction right in the beginning, but it was the first clone attempt and people were hoping for the YFI result in terms of price appreciation. Sure money came from China, but I know many YFI members who jumped into that pool as well. YFFI as a second attempt was much less successful, to the point where I don’t think another fork/clone will get any real traction. And as I understand it there have been at least 2 that were straight up scams.
I’m not totally against the idea, but I do question if it’s really worth the effort, at least in it’s current implementation. Perhaps if we had a more formal vetting process of what these projects goals were, how they were being managed, whether they had any interesting or novel approaches etc. And since we’re still trying to find our own footing as far as governance I think it’s probably too early to divert our focus to other protocols.
Vitaly (Twitter @srndptme) from loanscan.io, a DeFi and CeFi interest rates and analytics portal, and Linen App, a smart-contraсt wallet for accessing DeFi yields for long-term crypto investors. At Linen App we are bringing new to DeFi investors by educating them and providing user-friendly private key custody (no seed phrase management).
I have been following iearn and YFI social experiment since its inception and am amazed by how the community came together and members organized themselves. The analogy below may be helpful for the YFI community to consider while making a decision on the topic that @andre.cronje proposed “Incentivizing incentives for additional Yield Tokens”.
Right before I got into crypto, I spent 2 years in affiliate marketing/affiliate networks for consumer loans in the U.S. DeFi markets reveal similar value chains and exhibit the same behavior as traditional consumer lead generation for fin products markets. With all the liquidity mining craziness it has become very apparent that DeFi liquidity is very fluid and non-sticky, at least for now.
Let me explain below the affiliate marketing food chain and how it resembles DeFi.
Publishers = own end-user relationships and aggregate users by providing information and value added services. Some examples are Credit Karma, NerdWallet, Mint, Deposit Accounts, Lending Tree, Bank Rate. Publishers sell leads (bank accounts, investment accounts, loan applications…) to affiliate networks and sometimes to asset originators directly. Some publishers are affiliate networks as well, for example Lending Tree and Bank Rate.
Affiliate networks (can easily more than one affiliate network in the food chain) = for the most part do not own end user relationships and work via APIs with publishers and asset originators. Examples: Even Financial, Zero Parallel, LeadsMarket. These entities aggregate liquidity from publishers and channel down to asset originators and sometimes to other affiliate networks. Each network takes anywhere from 30% to 0% cut depending on volume. Some affiliate networks can work to break even or even lose money with certain publishers just to send committed volume of applications to asset originators to maintain volume pricing. Affiliate networks is a competitive business and not much defensibility here because the most important asset here is relationships with publishers. It is always harder to find end users (flow) than asset originators.
Asset originators = purchase flow of deposit, loan, credit card, etc applications. Originators are Prosper, LendingClub, Opploans, Lightstream, banks, insurance companies, etc depending on the product. Online-only asset originators spend 100% of their marketing budgets on Google ads (very expensive with long payback) and leads purchase flow through affiliate networks. Among other things, assets originators wine and dine their best performing affiliate networks and publishers to keep the leads flow going.
When I was doing affiliate networks, we owned websites to capture leads and built a network of publishers. We were aggregating consumer loan and other fin products leads. These leads were pushed down to Lending Tree, SoFi, Even Financial and pretty much anyone who pays top $$$ as the relationships are very fluid and it was very easy to switch affiliate networks and asset originators. Some of the leads were sold via real-time bidding auctions; it all depends on a product and relationships.
How is this analogous to DeFi?
Publishers = wallets and UI aggregators: Linen App, Argent, 1inch exchange, Zerion, Zapper, etc. Acquire users and maintain relationships. Once assets are in a wallet, they typically stay there forever as it is not natural for people to switch wallets/financial services often. Each publisher has its own market segment or market. Users of publishers have organic demand for products and non-speculative (long-term) liquidity. In the long run most of DeFi supply side lending liquidity and liquidity for Uniswap and Balancer will come from publishers (wallets) and platforms that own user relationships.
Affiliate networks = yield bouncers that aggregate lending and exchange liquidity. Idle Finance, yearn.finance + its forks. Have no loyal audience, easily forkable, and have no long-term business model defensibility due to the fact that all capital allocation strategies are on chain and liquidity is fluid in DeFi.
Asset originators = provide lending and exchange liquidity. Compound, Aave, Uniswap - analogous to assets originators and commercial banks/money center banks like Chase, BofA. It is hard to tell yet if there will be a monopoly, oligopoly or it will be more competitive in the long run when it comes to liquidity protocols/pools.
This analogy might help the FYI community to put things in perspective as liquidity aggregation will be important activity for many wallets and other types of communities with end user relationships.
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I appreciate your analogy, and it is thought-provoking, but I’m not sure it’s perfect. I think yearn is more than just a middleman “affiliate network.” I think yearn has stickness, and over time high reliability and performance creates more trust and loyalty.
In fact, in the YIP 33 discussion, someone suggested that if the LINK yVault isn’t released expeditiously, we’ll lose market share to Bancor because of their express concern that “once people park their money sometimes competitors 3 weeks later dont get considered.”
yearn seems to be occupying space across the “Publishers” and “Affiliate networks” categories in your analogy. I think you touch on an excellent point, though. The higher quality the experience for the end user - and not just the technically savvy end users, but even the casual crypto investors - the more likely they are to sign up in the first place, and to stick around. If yearn can deliver a high quality experience to asset owners who want to put their wealth to work and enjoy passive income, I think many would find better things to do than frequently move funds around to whoever is offering the absolute greatest rate of return for the given moment. They’re using a platform like yearn because they don’t want to do that in the first place.
Not to mention, yearn has the potential of positioning itself as a universal standard, a liquidity network, if you will, if it can just figure out the right formula.
As you say, what yearn needs to avoid is just being pigeonholed into that space where it’s little more than a tool (an ingenious one at that) that can be copied by others and doesn’t have enough features to develop some level of stickiness with its user base. Platform > tool.
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yes agree…also think would put us in the most advantageous position as a community in the long run…
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yes…im just happy we are discussing this now…so we have an idea on how we would approach this in future scenarios…we totally need to see which one of these forks is able sustain in the longterm…no need to act on a knee jerk reaction…as long as we keep organizing and building our governance systemand keep improving…these other forks will need/benefit from our approval…lets wait and see which one of these forks if any are able to build long term capital/innovation/community…we can engage with them at that point for some kind of incentive for appreciating their contribution…not for just forking the code and doing a pump and dump lol…
As more forks emerge…there will be more competion among forks to be better…lets see if that creates anything interesting…wait and watch…
in the meanwhile…its good to discuss the pros and cons of such an incentive system so we address some valid concerns and evaluate all sides before the time comes when we do need to finally pull the trigger…