Secondary Poll:
I see there’s heavy favor for the V2 Decaying model, but I also hear people’s contentions around long-term fairness of distribution and not creating a pre-mine situation.
With that in mind, I’ve re-created two more models, one showing distro to 75k, one showing distro to 100k. Please vote and discuss. Will move forward with an actual proposal soon™.
0 voters
Hmmm, that’s not how I read it. The primary use for YFI is collecting other farmed tokens that come from how yEarn works and maybe some other fees that accrue, as well as governing the protocol.
I would assume that yEarn could work without any more distribution of YFI. People could buy it on the open market. With that said, emission then becomes much less about getting the platform to work or be secure (as is the case for most cryptocurrencies) but as a way to drive adoption to yEarn. We drive adoption by having great products but also with a narrative that supplying liquidity and using products gets you a piece of the pie. In the end I think this will be a much more robust and powerful narrative than that of a supply cap.
Regardless of the inflation model which will be adopted (and further time for discussion and implementation is certainly needed for a well-thought proposal) I think there is something we should make absolutely clear and communicate to the DeFi community at large: inflation rewards for the yCRV pool will be assigned retroactively (starting from the end of the original 10k distribution).
This will keep both the interest and the investment active, while it gives the YFI community time to think things through without rushing dangerously.
totally agree with this, there is no perfect long term monetary policy.
we need to be able to adapt to changes fast.
I personally won’t concern too much about the multi-sig mint key at such a early stage, as long as those multisig holders are known and public faces.
@yfisensei I also would like to understand why you believe that YFI farmers are our customers. What value do they bring to YFI? Do they provide a revenue source? Do they increase the value of YFI? I just want to understand your view before I try to contribute to the conversation.
I agree, rewkang. We need to be flexible in the long term. And starting with low inflation is a good first step to keep everything running smoothly.
Yes, it’s in fact a 1 day to 1 week tiered pre-mine.
There was no premine by definition:
Everyone was on a level playing field when this launched. IMO people who participated earlier were absolutely risking more and should be compensated commensurately.
It seems very rushed to go ahead and make the inflation schedule and permanent supply within just 1 week after launch.
There should be an option that gives more time for constructive discussion and analysis. I propose a 3 week window for this discussion, with a 10% annual inflation split between the ypool and a 80/20 (YFI/yCrv) Balancer pool. y pool would incentivize deposits to the ecosystem and the balancer pool would keep YFI liquid.
Let’s not forget the majority of the community initially voted for a permanent supply cap, and no inflation until yfi_whale swung the vote. It would be a good compromise to offer a slight inflation (10% annually) for these three weeks while the community discussed further.
Also, almost all emission schedules have a front-loaded emission schedule that is very steep for the first six months. This is not conducive to long-term support of the ecosystem and instead supports short-term yield farmers to farm as much as they can in the first 6 months to 1 year then dump and go elsewhere. In fact, having a steep front-loaded emissions schedule enable whales and to gain a larger control over the supply as they will receive the majority of the rewards for a period longer than one week. Small holders and new comers will be greatly diluted. A linear inflation schedule is more appropriate for the long-term growth of the ecosystem. An option with this schedule should be included in the models above.
Agreed. The product is good enough without too much further incentive for users to still use it. No need for higher inflation. We can compromise and go with the 50k model but no more than that. Remember that that many Against Prop 0 have already sold their YFI and left. Inflationists are sliding toward extremism as an echo chamber builds up. See our post here: Yfi_whale Meta Governance, Rule of Law, and Short-Term vs Long-Term Businesses. Long-term value for YFI is preserved by avoiding hyperinflation.
Also agree that Prop C requires refinement. Neither the current distribution nor the Prop C distribution have carefully thought out impacts. TVL pro-rata distribution will lead to gaming later as we do not know the current suite of products that will be created in the future.
Maybe the community should vote on whether the YFI token is meant to be a governance token, like what YIP 10 proposes, or if it’s meant to be a financial asset / store of value. They’re conflicting goals. If you want to build a large community, then some (significant) inflation will be necessary.
A temporary inflation schedule is a good idea, even if the temporary inflation is low. FARMING MUST GO ONNNN!!!
We must balance between acquiring new farmers and price of YFI. Yes, some farmers may just farm and sell their crops but we must continue our efforts to attract new farmers and hope they stick around. Farmers care about yields which is determined by the price of YFI.
Thanks to @Substreight senpai for updating the models.
Hard Cap:
It’s clear that 50k camp is leading the pack. They have more votes and probably more voting power.
Although, I have advocated for 150k cap, 100k decay model is a good compromise. 30% of YFI farmed in the first week strongly favors early adopters but there is 70% left for other farmers to join in. 1 year later, the inflation schedule will be around 33%, which is plenty of time for others to join. This also means that the current YFI farmer whales will need to continue to provider liquidity and YFI whales to continue to buy YFI to keep their whale status.
60% of the total supply of YFI farmed in the first week is clearly not fair. If Satoshi mined 60% of BTC in the first week, I doubt that BTC will be where it is today.
Lastly, I’d like to remind everyone YFI is not the only farm in town. Some farmers will jump farm to farm in search for higher crops. If you want farmers to stay, you need to build the best farm and the best farm is the most inclusive farm - a farm built on fair distribution of governance tokens.
exactly, 30k over 1 week and then 20k over 10 years just looks so rigged, its that simple. i dont know why people are so blinded they dont see the problems this can cause longterm.
good meme yet again, customers will flock to highest roi platform, and if yfi aint incentivising an upcoming yfi-clone will.
Hey Everyone, I expanded on some thoughts I have been having about the economics and distribution of YFI. Posted here: YFI and the Evolution of the Token Offering
Very different framing of the situation and think it could help with the conversation. let me know what you think.
@Garry It doesn’t look rigged at all. I think it looks generous tbh.
The last week was essentially an ongoing airdrop where people could also buy on the open-market. If you look at the results achieved in terms of addresses, equality, GINI coefficient, it is probably the most fairly distributed cryptocurrency ever. Please point me to a counter-example.
Yes, it is the most fair distributed cryptocurrency.
The question is why are we stopping this distribution methodology? Please provide supporting to slow inflation to such a degree (60% for the first week and 40% supply for the next 10 years).
See YFI whale’s post. Inflationists should be willing to compromise with the rest of the community, many of whom wanted no inflation at all. 50k decaying model is a compromise.
And:
I love it. I’m an inflationist just like Jerome Powell (Fed), Christine Lagarde (ECB), Haruhiko Kuroda (BOJ), Zhou Xiaochuan (PBOC)! I need to change my name to YFI Inflationist
We have finally escaped the ICO model where the team and VC reserves a majority of the tokens for themselves. Now, the early adopters are using their greed to cement themselves as the governor of YFI in perpetuity.
The early adopters (within the 1st week) should govern the protocol!! Our job is complete!! Late adopters?? We will let them participate but we should let them receive 40% in the next 10 years.
What a joke
Jason did you read my post I linked above? I think it answers some of your points, but the TLDR is that the emissions are not inflation, but a new token distribution model. We have been the beta testers who have “tested it in prod” and now we need to release it to everyone else once we iron out the details.
No eternal farming rewards or ponzinomics. No reliance on a scarcity meme, although still scarce. Just a fair distribution, of which this week just just the dry run.
I guess @yfisensei won’t explain his reasoning on why yield farmers are so important so I will just go ahead.
I think we now have the responsibility as YFI governors to: 1) maximize yield to those contributing to the yearn pool because the higher the yield the higher the TVL, and 2) to maximize price for the benefit of YFI investors.
Andre is creating a system that should theoretically maximize yield for those not technical enough to do it themselves. I would be open to sharing inflation with these contributors should there be a need.
I personally don’t think we need to focus so much on yield farmers. Not too long ago, projects were very successful without the enticement of yield farming. I actually view yield farmers to be a little parasitic and always looking for the highest yields. One can argue that YFI’s current system created a dilemma between farming and buying (since so much resources were needed to farm). I know a lot of people who didn’t purchase YFI because they wanted to devote all their resources to farm. And farmers generally sell unless they believe in the project long term in which case they would buy if farming wasn’t available.
I don’t know what is the best inflation number. But I hope we implement a system that requires people to purchase and stake YFI in order to farm YFI. So regardless of whether we choose a small or large inflation number, we know that there will be a lot of value in holding YFI thus promoting price appreciation.
