I purchased over 90-95% of my YFI because I thought that was better to accumulate rather than mine it. Some of my purchases were around the prices it has been in the past day or two. If you want governance over YFI, could you not just purchase YFI as I did?
On a separate but related issue, I would argue that adoption of YFI’s products (as evidenced by TVL) are much more important than wider adoption of YFI. The former directly correlates to the success of YFI and the latter is much less correlated.
And finally, I think most of the people here are open to some sort of inflation. But I think it is even more important to require staking of YFI in order to receive YFI rewards. That way, there is more value to holding YFI.
I like the idea of staking YFI for YFI rewards and would likely support that. I might have explained poorly above (English is a 2nd language) but my biggest issue is the narrative the community is self imposing buy cutting yield mining and limiting supply too much. I know people can just buy YFI (I did) but that doesn’t negate the feeling new adopters will have. Feels like a select crowd were able mine and now get to call the shots because of it. I know that’s not actually the case (since anyone could mine/buy) but I don’t believe that matters when it comes to narrative because it will still feel bad. Unless you have an absurd amount of money to buy YFI for, any new community members will have a disproportionately disadvantage in any YFI governance. Having higher inflation would still insure early adopters get handily rewarded. To me this project was about giving the power back to the users/community and I think the current distribution proposals undermine that.
What do you think will happen if we increase inflation? Who will get the majority of that? The same whales that you are worried about having too much control. If we used the same mechanism as before, the whales can use their idle stablecoins and mine at much faster rate than everyone else.
So you are allowing them to accumulate without them paying anything in the end. But if we limit inflation, at least we can force the whales to buy if they want more power. With high inflation v low inflation, the whales are going to get their share because they just have more capital to work with. So really liquidity mining does nothing to even out distribution. It’s possible that it even exacerbates it.
Let’s just agree that we will have to stake YFI to receive YFI rewards. Give value to holding/staking YFI. That is the most important decision to make.
The inflationist argument boils down to the following points, all of which are sub-economic.
“It’s not fair”, namely that is we need to dilute supply to make governance more inclusive. The fact that anyone could have mined YFI is never discussed by inflationists because it negates the dubious narrative of an “undemocratic” distribution. Also, inflationsits dance around the fact that anyone can buy YFI for a stake in governance. The argument on fairness is not an economically motivated position. It is also highly hypocritical becaue distribution was very fair.
“monetariests are greedy”, this is a variant of argument 1) which panders to morality. No, we are not greedy, we just don’t see how inflation as beneficial to the protocol or to governance. Inflation can (and often is) abused to achieve sub-economic aims.
“there will be no inventive without inflation”, that is to say that if the yPools are not churning out YFI as rewards that people will not use yPools or other yearn contracts. This is absolutely not true, and makes me question whether inflationists understand the core value proposition of yearn.finance. The idea is to create yield optimized synthetic assets. Anybody can dump capital into the yPool and make money as an LP. Why do they need to be rewarded with governance for doing so? Soon with LINK in yVaults and vastly cheaper v2 contracts, earning interest on your capital will be accessible for all.
Also, we have already seen what happens when incentives disappear. Liquidity evaporates. You cannot build a robust incentive structure on inflation alone. The product has to be good. The incentive is that the product is the best on the market. No manipulation needed. Subsidising your productivity with inflation simply taxes your stakeholders and that is it. Again the argument for inflation is sub-economic.
“YFI is not money so it is okay to dilute the supply.” In addition to blatantly contradicting the fact that 300m in hard capital was staked to mine YFI out of the contracts, this statement negates the fact that YFI is trading above zero dollars. While YFI is not money, it certainly is stock in the protocol. YFI is ownership in the platform (that is what governance means). When you dilute supply, you dilute ownership which is again sub-economic.
If someone wants to obtain a stake in governance, they can buy the tokens on the market. YFI is still a small market cap token, so there is plenty of room for new governing interests to get involved.
Do not ruin the amazing achievement of hard decentralisation with sub-economic inflationary schemes
I fully second this.
And I think it would be useful to have a setup which gives increased rewards to those that have staked YFI longer in a continuous way.
This would really incentivize skin in the game.
Yes, you have summarized inflationist’s argument well.
I’ll summarize deflationist’s argument, with a quote of yours.
It’s plain and simple. I commend you for the intellectual honest. We all look for our own self interest. All other arguments that I have read is unconvincing.
Oh please. How do you know all the inflation’s eth address? I do agree with you that YFI holders should vote and decide. Deflationist probably has most of the whales on their side. Who knows what the long tail YFI holders would do? YFI is pretty decentralized. Whales don’t hold most of the votes. I’ll speculate that the long tail holders are farmers and they want the farm to go on.
I’m sure 100m just miraculously found it’s way to YFI. No need to incentivize them whatsoever.
I agree that product is more important than incentives. But governor longrun, how have you contributed in finding users/customers and make the platform attractive? Oh wait, you didn’t. @andre.cronje did all the work. Your main contribution is to defend ur YFI bags (this is the only thread that you’ve contributed)- that’s okay, at least be intellectually honest about it.
My contribution? Memes. I don’t pretend to do the heavy lifting like @andre.cronje senpai. I’d also like to crush the price of YFI so I can buy more YFI bags. Once I load up on my YFI bags, maybe I’ll become a deflationist.
I completely agree with staking YFI to receive YFI rewards.
It is important to keep YFI prices high. This is good for farmers (yields) and YFI hodlers.
Where inflationist and deflationist disagree on is how to keep YFI prices high using monetary policy. Inflationist believe that a higher adoption rate of YFI through the incentive program will help YFI prices in the future. Deflationist believe that low YFI supply will be the best support for YFI prices.
Please let me know why you think increasing supply is subeconomic? The WHY is important. You are throwing mud at a side without explaining why you think increasing supply is bad for governance or the price of YFI. I’d argue it’s the opposite and capping at 50k or less is a bit short sighted. Having more people vested in YFI governance is a good thing for the health of the protocol long term. Increasing supply makes the barrier to entry easier and more enticing to a wider audience. I’m not saying go full on xrp or anything but even capping at around 100k makes YFI extremely scarce while not making it 100 person decision club. I’m pretty sure it creates a much stronger community that in turn makes the protocol stronger.
You say the fair distribution is never discussed by people that want the supply increased when I literally acknowledged it three messages above yours… The distribution was fair. That’s likely why a lot of us are here now. But it being fair doesn’t necessarily mean it will be perceived that way. It was fair in theory. Instead of distributing to VC’s, partners and founders risking their money it was distributed to a bigger but still limited selection of random people that were “in the know” and risked their money. I’m not saying people that farmed the first week shouldn’t be rewarded more than later adopters for taking that financial risk. They definitely should. But I think that for outsiders the extremely limited 1 week farming will come off as pretty much the same as a premine. Imagine if all 21 million btc was distributed in 1 week lol you think that would feel fair? There would be no btc in use now. I know it’s not apples to apples and YFI’s has an actual product that happens to be incredible. But it’s also very much open source. That makes a token narratives a very big and important deal. See BTC/BCH/BSV or ETH and every other smart contract chain.
You ask why LP’s need to be rewarded with governance when they are already getting yield. I think open source is a big reason. Look at how many defi projects have launched in the past 6 months and we are still early. There will be lots more. Skin in the protocol makes more loyal supporters and code can be copied. An xrp army would actually be useful for once. Discussing staking would also be an interesting thought in terms of long term buyin.
We seem to very much agree on the product being great. I can’t argue there! It will be great regardless of supply staying the same or going up. Instead of thinking of it a diluting ownership I’d reframe it as a hedge on the defi space as a whole. If there is one thing I can guarantee it is that tech is always changing. And teams that had the best product three months ago don’t always today. If that were to happen the community are the drivers that get us through it and 1000 minds is better than 100.
I don’t get this narrative that users during the first week held more financial risk than the users that will use the project in the coming weeks. Not at this stage of the project. We haven’t even voted for a mechanism to audit the code as it goes live. I mean, Andre’s new yVault contract just released came out with a bug that would have caused users to lose ALL their funds. What’s to say that was a fluke? I mean he takes pride in ‘testing in production’, which is recipe for a blow up. Saying first week users had significant more risk than next week’s users just isn’t true. Why shouldn’t new users get rewarded just as much as first week users? Both sets of users are exposed to very similar risk profiles.
@FiFarms is right - ppl aren’t going to use the protocol if there is massive risk - risk isn’t solved after 1 week - V2 is just as risky, if not more - gotta inflate otherwise we get a bad reputation as a protocol - I farmed a small amount and then brought in at $3000 - if we keep the number of tokens at or below 100,000 we will all be stupid rich in 10 years. People shouldn’t be discounting public sentiment about pre-mine and fairness as a driver for use and adoption of the protocol. If there is a hack and we have adopted a greedy inflation policy people will say fuck you to the protocol and we will all be poorer for it.
There’s been a lot of good discussion in here, most of it in a cordial and respectful manner. However at this point it seems like there’s enough support in the polls to move towards a formal proposal and ultimately vote.
Is there an update on where we stand on this? I believe I read somewhere that we were waiting for the “Voting with YFI” proposal to pass. Is someone now actively working on creating a YIP and/or On Chain Vote for a proposal along these lines?
I was in the pool on the 2nd date. So yes, I was late.
My apologies governor longrun for offending you. I wasn’t trying to attack you. Most shareholders don’t contribute to the company. There are a few activist shareholders which take board seats and influence the company. Making discussions on inflation policy does not help the product. Just like how talking about share buybacks does not help the Company’s product.
You claim that your role as governor is to find user/customer and make the platform. I am happy for you to prove me wrong by pointing out the actions that you have taken to help build the platform or acquire customer. Please do. It’s your role after all.
I make no claim that I contribute to YFI. Nor do I consider myself important to contribute to YFI’s product or customer acquisition. Just memes.
I was sarcastic about crashing the price. Please. Who am I to influence the price of YFI? I’m just merely a keyboard warrior passing by this forum.
I was being sarcastic. It found it’s way because YFI’s inflation was generous. I agree that it’s the type of capital required to succeed in the long run. Did you notice that the TVL of YFI is crashing? Engagement is decreasing and wallet addresses have peaked.
I have YFI bags. I believe expanding the pool of YFI owners through a generous inflation policy will increase the price in the long run. I was planning to expand my YFI bags. It has a killer product, a visionary founder and a strong community - what’s not to love? But I’m starting to see public interest in YFI decreasing due to it’s restrictive inflationary policy and that’s disheartening.
I don’t deny that the governance system can change it! But this is in many ways a question of precident and raises lots of interesting questions about governance.
Take American government and law for example. Laws are created by the governance system based on a series of documents and ideas laid forth in said documents that outline the scope of the roles of the government. Traditional (american) law rests heavily the interpretation of those documents, and when the interpretation is ambiguous, it falls back on the idea of precedent. If that precedent is unacceptable to the governing body then it is up to them to modify the documents to make them clear in their interpretation.
Where am I going with this? Well, right now there is no such document for the yEarn ecosystem other than Andre’s blog posts. One could make the argument that these should be distilled down into one document (or a new one made!) that describes the role of YFI and yEarn governance. A yEarn constitution if you will, that sets forth the goals of both the ecosystem and the role of the YFI token within it.
A document like that could go a long way in helping the governance system structure changes in ways that are viewed as legitimate.
The governance of a decentralized project should seek to distance itself as quickly as possible from its creator(s). It seems Andre understands this or he wouldn’t have done it. The value and ethos of the protocol is derived from the social contract that enforces its network effects, not some document used as a political tool. Decentralized protocols are new mechanisms for coordination; it would do you well to understand that they do not fit neatly into past paradigms.
