I just wanted to say that I too was late in farming. Not super late but relatively late. But I decided to buy most of my YFI (maybe 90-95%) and they weren’t cheap. I knew that I wouldn’t be able to stake enough to make me happy. I think a lot of people ended up buying YFI.
So right now, I have a good amount of my portfolio in YFI. Let’s say that I have $2mm in YFI. Wouldn’t it be fair to ask you to buy YFI if you wanted a say in governance? Why do we have to give it away for free?
I think that this may cause the current price of YFI to go down. I acknowledge that and in many ways that is bad for me (I have fomo’ed in at 3k too). But If we (the community) are going to consider ourselves stewards of the long term interests of the project then the distribution policy of YFI should focus on the long term benefit of that distribution and not the short term price implications. Any decision will alienate some group of holders. It is our responsibility to pick the most sustainable long term strategy. YFI will represent the value of yEarn as a whole and it is my belief that a higher max supply will be beneficial to the overall value, even if painful in the short term for the YFI price. We must be forward thinking.
I agree that yEarn should be able to stand on its own without any more issuance. This is why I am trying to frame the conversation not as one in which we need YFI farming as a crutch, but to use it as a way to help distribute YFI in a way that has not been possible before.. This is the main point in my post here.
Attracting liquidity is a beneficial side effect, but if all the liquidity goes away after the farming stops then the product isn’t worth it and we have just re-created Fcoin.
100% agree. see point above. Also applies to your last paragraph. I want to stress that this is not about creating money or creating some eternal yield farming pyramid scheme, but distributing the token as fairly as possible so everyone who wants to be an owner of yEarn can be an owner of yEarn.
Why is the important to distribute governance more than it is now? We can barely more forward as it is. It isn’t like one person or one group (even with yfi_whale’s former 16% voting power) was able to drive the direction of YFI.
The initial distribution already happened. What we’re talking about is additional issuance, i.e. inflation. Participation in governance can effectively be acquired on the open market, that’s about as fair as it gets. And those who do so will likely be against any major forms of dilution as well. There is reflexivity in that social contract.
I find the inflation argument to be a bit of a red herring, but I understand and agree that some inflation is in the best interest of the protocol’s development. But I’m not sold on its necessity for bootstrapping liquidity.
this is being worked on. right now the latest proposal is donations to get funds quickly and not have to rely on governance, but I think most agree that these concerns should be separated. There is a thread here: Discussion: Yearn Finance Security
Its not being “given away for free” any more than it was the last week.
Because the distribution of governance of a distributed system is imperative to it being successful. I know I don’t have hard fact to back this up, but just look at @irrelevant 's post above to see how outsiders will view the project if we are not diligent about distribution of YFI more broadly than it currently is. That is how most people will view yEarn.
Why can’t YFI be distributed through market purchases like most other tokens? Yield farming just became a thing. Distribution wasn’t an issue before yield farming.
I definitely understand what you mean and yes I do believe it is fair to ask me to buy YFI for a say in governance. However, I presumably wouldn’t be buying YFI from people who are actively participating in its governance (equalizing market share), but I would rather be purchasing from farmers that are uninterested in its governance and just want profits (this is complete conjecture btw). Those that ARE invested in the protocol’s governance are most likely hodling and so whatever I do buy won’t make a dent in the expanse of decentralizing the protocol’s governance and will only make me another hodling entity. When there is no more YFI to be distributed (because everyone is hodling) where do newcomers fit in?
I would urge everyone who thinks the initial distribution has already happened to think about this from someone else’s shoes. What if you had been on vacation last week? Or had Covid? What privileges us over that person? Why were we granted this short window in which we could farm this token and someone who discovers it next week can, but with significantly less efficacy.
Sure, people can buy YFI on the open market, but we have now distinctly used our powers of governance that we got one way to skew the playing field to benefit us as early entrants. This is like VCs dumping on retail plebs.
If you don’t believe me or don’t get it, I don’t have time to try to convince you, sorry.
Do I wish I knew and mined BTC when it first came out? Yes. Do I feel that I have a right to mine it at a rate when it was first issued? No.
Crypto or any investment really is always skewed in the favor of the people who find it first.
Regardless, I am open to some inflation. I want to compromise. YFI will get nowhere unless there is compromise. But I did want to voice my disagreement on the importance of inflation to lure yield farmers. I just don’t think it is that important.
I agree and am im no way proposing that everyone should always be able to farm YFI at the same rate as last week. I am just very worried that the “compromises” are all being anchored by an incredibly low number and it is skewing the conversation. I really wish YFI didnt have a price, because I think this conversation would be much easier to have.
I think you are thinking about this correctly and it is why I am trying to reframe the conversation about “inflation” as a lure to instead be about distributing ownership of the project to as wide a userbase as possible
I believe the inflation rate should be as low as possible. The volume of the system will dictate the worth of the governance token and the more dilute it becomes the lower value it will hold. Proposal A for now until we see what else is in store.
I agree. Ideally the supply should stay hard capped at 30k, but if we do need to eco system to grow, proposal A is the only acceptable one for now. We still haven’t hit TVL of 1 bil.
Early adopters from the last week should not view themselves as the recipients of a completed distribution event, or as gatekeepers of the project, but as beta testers of a novel distribution mechanism. It is our job to work out the kinks and now distribute tokens more widely.
I also urge you to compare YFI to 99% of the other crypto projects out there where a significant portion of the supply is held by team, advisors, and other project contributors (ie, can be and usually is above 40%). Projects with those numbers can be very successful yet we are worried about someone who might hold 3%?
yEarn/YFI may already be better than 99% of crypto projects but we have an opportunity to do something so much better even the other 1%.
Everyone talks about how much they love all the innovation in DeFi and then seem to fall back on the same old ideas of absolute scarcity and a hatred of inflation/ issuance, even if they don’t actually apply the the situation at hand.
I’m not worried about someone holding 3%. If inflation is higher and whales continue to mine, they will still probably have 3%. but there might be a million other people who see and hear about the project, realize that they still have time to get in on the ground floor and start farming. This is an opportunity, not a liability!
I’m with @n00b @skrypts @roman220. Do I wish I mined ETH when Vitalik launched it? yes. But I understand the asset has value in the open market as its value proposition grows, hence I buy/sell it as I deem profitable. As long as development of products continues I don’t see the need to double, triple the current supply. A slowing emission schedule of about ~50% more total supply sounds reasonable. Tokens will get distributed to different holders through the open market, a “fair” distribution just cause you missed last week will dilute the risk others took in taking a chance on a “valueless token”. I think you’re on a small island on this one @rgalloway
I’m with you but, for good or bad, this project has been effectively captured by early adopters. I don’t blame them as their rational interest is to keep YFI’s value up, but this means that any plan of making the project more accessible to newcomers will fail. Any proposal for an ambitious or even permanent inflation schedule that would allow newcomers at any stage of the project to ‘earn’ a significant say in governance will not pass, because that would dilute the dollar value of the YFI token and that’s the principal motivation guiding community decisions.
We are not looking to attract “adopters.”
Our job as governors is to find users/customers, so all we need to do is to make the platform attractive to the users, that’s it. There is absolutely no need to incentivize “adopters.” I can guarantee you if the users are happy the adopters will find a way to get in by buying YFI on the open market like a lot of us who saw the huge potential right away have also done in addition to the mining.
I agree that the main disconnect is pricing, but not in the way it’s being framed. To acquire YFI you need capital, whether that’s buying it outright or by lending it to a pool. In either case, those with the most capital will be able to accrue or earn the most YFI. Why are YFI holders who “earned” it via liquidity mining any more valuable than people who purchased it believing in the project? Who’s to say the LPs in the future aren’t just looking for the highest return? This is why the inflation argument is just a red herring. YFI has captured the bitcoin of DeFi meme. Having a sound and permanent monetary policy only adds to it. Going away from that would do more harm than good at this stage.