Makes perfect sense to me. Most people don’t really care about what happens under the hood once they’re in the Vault. IMO changing this to a performance fee is both logical and more ideal for yEarn sustainability.
Will be voting “For” this proposal.
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I disagree strongly. There is so much competition (YFII, YFV, Harvest,Finance, etc, etc). and yet Yearn has built momentum due to total AUM and speed of development (plus we have Andre of course). If we’re too ambitious then users will migrate to other platforms in order to maximize yield.
5% of profits is too much guys… Maybe 1% of profits and continue building to create a strong sustainable advantage. We can always increase the fees later once competition is left behind.
If we try to get rich quick, we’ll loose momentum and a great opportunity to build something extraordinary that is worth much more in the future.
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Will be voting yes here. Most people already misunderstand the 5% fee as on profits, so willingness to pay already exists. Furthermore, 5% is very reasonable and very few would benefit from allocating capital elsewhere given the significant pooling efficiencies in position management and gas costs.
I’d argue that 5% profits is not too much and is actually quite low. I think it was mentioned before but hedge funds routinely charge 2% of AUM, regardless of net profits, in addition to 20% of net profits annually.
The competitive advantage against competitors is the large AUM, the rapid pace of innovation, the first-mover advantage, the brand visibility in the market, and the collaborative and diverse community that has formed around the project. Most of these items can’t be replicated easily, if at all. 5% of profits for the items above IMO is even cheap.
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I would argue that Yearn is not a hedge fund. Everything it does is public. The cost / speed of reallocating funds to other platforms is minimal. Yield and risk are the only two variables to attract / retain capital. Terrible analogy btw, I´ve seen it a lot and really doesn’t reflect what Yearn does. Probably an ETF is a better analogy. Those charge ~1% of AUM per year usually.
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Can we model how a 5% performance fee would impact YFI staking rewards? It makes sense to maintain incentives for YFI governance purposes, given the YIP for refunding gas fees to voters (although I imagine overall in the long term this will probably have a negligible impact), however we shouldn’t be greedy - I propose we simply aim to keep the current rate of rewards to YFI holders. A 0.5% or 1% performance fee may well be enough for that.
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I don’t like this idea. Creating value for users should be the number one focus. Amazon is a great example of this, and that’s who we should be emulating, not hedge funds.
Creating a brand and user loyalty > Short term value extraction
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Completely agree with this.
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Cost and speed to reallocating funds to other platforms is minimal???
Are you following here?
It cost 25k just yesterday to manage the vault and harvest.
So no, it is not minimal. I think that 5% is way better than 2-20% and with better yield. Im in for 5%
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Not an expert but wouldn’t the 5% gas subsidization cost as it exists apply exactly in these high-gas scenarios to make up for the expense?
I meant the cost of transferring funds from YFI to YFV (or whatever) that replicates the same strategy, but with lower fees.
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I support banteng’s proposal. I think this one goes too far.
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Unfortunately we can confirm that the 5% gas subsidization is not enough .
I understand that you could change from yfi to yfv or whatever other yfi fork but that’s your call.
It’s like saying, I would move to nvidia if amd charge too much for their GPU. Fine with me, do you get the same gpu power ?
Honestly 5% is nothing when managing that amount of money. Everyone here is doing that for free right now. So covering the cost of the bot is a no brainer .
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I agree with you. My point is that 5% of profits is too much right now. Let’s leave it there.
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Leave it where? We only have 5% of gas and its not enough so no, let move it to 5%.
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@srs-parafi - would you please disclose if you are associated with ParFi Capital?
I think it’s you that are missing the point.
I own YFI and I bought it around $10,000 each so I have all the interest to receive dividends from it and that it will go up in value. However I think yearn as a protocol is already massively profitable, with very minimal fees leaving most of the profits to investors that risk capital in yvaults. I think this is fair.
I think this is what crypto is about. yearn already reached $500,000 target for the treasury in record time, I don’t have the details now, but I think it was within a few weeks. since then it has already been distributing a ton of profits to holders just by the fee on subsidized gas and the 0.5% withdrawal fee.
If you want more sir, my opinion is that you are just greedy. And let me reiterate again: I bought YFI for $10,000 each, I don’t have many just a few, and I hope to keep this for the rest of my life. But I think I should also be fair.
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I much prefer we first discuss how to solve this problem raised by @banteg Gas costs are too damn high
It’s related but it addresses the problem from a real and current necessity, not from the possibility to “raise the fee % because everyone misunderstands it already”
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not enough for what sorry?
The treasury already reached the agreed cap of $500,000 and has already been distributing plenty of profits to holders.
enough for what?
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The cost should be deduced, it’s very simple.
But we are not talking about deducting costs here, which is normal and it shouldn’t be in any other way.
Here, you and others want to keep money to receive dividends just because you hold YFI.
I don’t have much YFI so I won’t be able to influence if we vote. but I do have a voice, and I want you to hear it loud and clear, this is wrong to me.
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Yes, I am a partner at ParaFi