Can you describe what this means to you? What is this social contract? Is this explicitly stated somewhere? If not, are you sure it exists?
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I want to take a minute and turn the perspective. Since clearly the deflationist half of the community really isnt talking as much as the inflationists.
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Fiduciary duty to current YFI holders. When companies print equity, that equity is used for specific purposes, such as keeping the lights on. Here, we have a system that already brings revenue with NO INPUT, therefore all profit. It is a pure economic wheel we dont need to push, we can just let it push us along.
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It is more greedy to print, those lobbying for a print are the ones who want YFI yield. This is selfishly motivated and has no direct benefit to YFI. Has anyone given a reason to print other than: a) i missed out, b) id like to earn the yield, c) more people is better because generally they like people. None of these are profit generating motivators for an equity print, and i see it as greedy on the inflationists part.
At some point we need to think why this token went out. Clearly CRV is the incentive token. YFI was distributed as a governance token to be paid will a small portion of the intake from the platform. Why are we now saying we must incentivize a wildly successful platform with YFI and CRV? Do we not at least want to: 1. Wait some weeks and see if usage drops, 2. See what happens when CRV releases usage wise
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what is the reason for inflation? YPI 12 to reduce quorum from 33% to 20% has just been activated. We agreed to move governance faster because there are YFI tokens that aren’t used for voting on proposals.
If waifu tokens aren’t used for governance, why does the platform need to print more?
inflation is taxation on the shareholders. Shareholders that took the initial skin in the game with a disruptive governance-finance app tested in prod.
the distribution was open and free, with no inflation everyone is open and free to make money with yEarn and offer that money in the market to be a decision maker in https://ygov.finance/
A quick update on the on-chain poll for this:
- We have YIP 10 and 12 implemented, this will be the first proposal to be voted using YFI only.
- The poll will likely start tomorrow, we have the new contract and the UI ready.
- There will be a separate forum post when the winning proposal is promoted to YIP and the voting starts.
- Andre will set breaker on the old contract, so everyone will be able to withdraw even if they voted recently.
- Proposal will be split into two YIPs - one concerning the inflation model and the other one concerning LP/DAO split.
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These are good points, but like much of this, open to interpretation, so I’ll give you mine.
You are assuming this fiduciary duty, which is fine. But nowhere was it ever stated that anyone has an duty, fiduciary or otherwise, to current YFI holders. The fact that the token was released and specifically called out as having 0 monetary value is an argument for exactly the opposite. But if the community wanted to make this true, then it could vote it in.
I agree with this. This is part of my argument, which is not “more inflation is good,” but that we really haven’t done a formal accounting of all the future costs and needs of the yEarn ecosystem, so picking an emission schedule and then burning the keys is premature at this stage of the game. In order for yEarn to be successful, it will have costs that need to be addressed (salaries, audits, marketing, incentives, other stuff we haven’t thought about yet).
This may or may not be true. Before YFI, yEarn was moderately successful with AUM of roughly 10million. Adding really high YFI incentives clearly added to its visibility and the AUM. But at this point we don’t know what will happen with no, or low, rewards. Yes there are other products coming out, but we also don’t know how those will fare without incentivization. We don’t know what incentives competitors will put out and what will be needed to compete in the future. Nothing about YFI is inevitable no matter what prominent twitter accounts may say.
Getting into an argument about who is more greedy isnt going to help anyone so I’m going to ignore that and try to address the issues. As mentioned before, having funds to direct towards incentives, be it liquidity mining or something else, may be the key to success of yEarn. Part of this is determining how much gets directed straight into incentives, and how much goes to a warchest that the governance system can distribute. If not, and down the road they aren’t needed then governance can vote to burn them.
Having more people who feel strongly part of a community is a strong network effect. The cost of a continuous equity distribution to users may actually be lower than the revenue gained by loyal customers who feel like they are a part of mission. This last week has made lots of people feel very connected to the product. They feel ownership of it and are more likely to use it and support it. I am only proposing that we continue that and let other people feel that same excitement.
CRV and YFI are entirely different things. yEarn just happens to use the curve.fi platform. But I do think it is wise to wait and see how things play out.
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On the flip side, the distrubution of YFI could be seen as just that. No need to complicate it as an incentive token ever, such that even if we choose to give more out, it should go out for staking only to current YFI holders, not liquidity providers.
I guess i agree about the whos more greedy part and thats kind of my point its annoying deflationists keep getting called greedy when i dont see it.
I would prefer a propsal to make CRV a universal incentive token across YFI platforms, thus YFI can remain governance with a set cap that was fairly distributed and now as andre put it runs the network because he doesnt want to and gets paid a little which anyone can fairly buy their governance spot same as most of us non liquidity providers. No reason CRV couldnt be expanded to fit the purpose of what everyone is trying to pidgeon whole YFI into right now as an incentive token.
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We may want to even delay until we know the impact of CRV launch. An unintended consequence might be that CRV like you say can work as an incentive for yearn platforms (and YFI value). It also remains to be seen this week what the impact of 0 emissions is (we didn’t crash and burn as some people were worried about…we are approaching ATH today, so maybe 0 emissions isn’t that bad?) I’m undecided and more of a “wait a couple weeks and see”…
Also, why no flat models? If we do emissions, I prefer flat distribution, which encourages longer term investors.
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Any YFI that continues to be released should be distributed to
- LP stakers
- Vault depositors
- Current YFI holders (air drop)
I don’t think it should be done through the pools again, but only from staked LP tokens
On the other hand, I think YFI should still be released to pool 3 YFI/yCRV. The huge amount of stablecoin locked there (due to the 98/2 setup) is what has brought attention to YFI and has made people realize how huge was the project’s potential.
Also, it can piggyback for free on the enormous popularity of Curve (via their ypool, which is how people get the yCRV in the first place), which is bound to explode with the release of their token in a few weeks, possibly around the time when YFI distribution restarts.
Finally, people in DeFi are already familiar with it, so they could jump on board very quickly, giving momentum to the project as soon as inflation resumes.
Inflation undermines consistency principles. No amount of snake oil can cover this basic truth.
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A linear distribution is more sustainable for long-term growth as it will still encourage LPs to join the ecosystem, not just within the first 6 months to 1 year when inflation is much higher.
Whatever is the most popular model should have both a linear and steep curve option to be voted on.
The yfi platform doesn’t have the authority to distribute crv tokens… You only get them if you’re in a curve pool, not sure why you think they would distribute them to yfi holders or this platform?
Curious thought. But if you’re yCRV are on balancer, doesn’t balancer receive the CRV?
Yes the balancer pool does generate crv for holders. But it goes to their address only not the pool, I think.
I wanted to show you the COMP chart. 2880 comp (or $388k of value) is distributed daily. And total supply will be 10 million which equates a fully diluted MC of $1.35 billion at these prices. The chart shows the selling pressure created by the farmers. Price goes down if demand cannot meet the supply created by the farmer.
On the flip side, there is 1350ish YFI on Polo, uniswap, and FTX. Some people are paying high slippage because there is so much demand v supply (link). And the only sell pressure are those wanting to take profits.
Just saying…
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You have this backwards. This is just price discovery. Of course the price per Comp token will be lower if there are more of them. That’s not the point. The market is trying to determine the value of Compound and price it in COMP tokens. If half as many COMP tokens were distributed over the same time period, that graph would look essentially identical, but the numbers on the Y axis would be different.
The goal of yield farming is not to create a price for a token, or prop up the price of a token, it is to distribute a token and incentivize people to use your product.
This is exactly the point that we are all trying to make. We all have different cost basis in YFI. Some of us farmed and some of us bought. A declining price in YFI would hurt the people who invested in YFI already.
This. And some of us who bought considered very heavily Andre seemed to be saying YFI will be paid by the platform not the other way around, and its a governance token, not an incentive token. Anyone had a fair chance to farm. And now like me anyone else also has a fair chance to buy.
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And I disagree that one of the main purposes of yield farming is to distribute a token. I believe it is used to incentivize people to buy the tokens of, provide liquidity to, and/or utilize the project. A project that uses liquidity mining without the benefits of above are doing it wrong. And if liquidity mining does not help support a token’s price, they are really doing it wrong.
Driving down the price through printing seems to be all you want from your statements here or maybe what your saying is beyond me. I dont see you discuss what the print will do for us or why liquidity providers need a print incentive for 10% yields or higher.
Edit: id be more welcoming to the idea of a print if it went to the governors for their hair work rather than liquidity providers already incentivized. But i dont think thats your stance, you want us to print for LPs only
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