What are the benefits for the protocol if we allow that? I understand that it makes life easier for individual holders but what does YFI benefit from it?
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This isnāt a very pragmatic scenario. Since wallet B & A are essentially the same party they would need x / .40 amount of capital to constantly borrow the YFI. In order for Wallet B to even borrow the YFI they have to put up collateral. Scaling enough to make a material impact to governance voting would be an astronomical amount of capital.
If someone did have enough capital to borrow the 6k AAVE they potentially are already a YFI whale, and doing such a practice is more likely than not going to hurt the ecosystem, including their investment. If they arenāt a YFI whale and hold zero YFI, the most they could obtain would be 6k YFI and 6k aYFI, which isnāt a controlling interest and isnāt pragmatic the way the AAVE works. Itās a totally theoretically example.
But I will think about solutions that could mitigate such double counting, and if anyone has any ideas I welcome them.
What are the benefits for the protocol if we allow that? I understand that it makes life easier for individual holders but what does YFI benefit from it?
The benefits is a more complete voting pool with likely higher voting participation. Right, now there are 6,400 YFI in the governance staking pool eligible to vote on proposals. Including aYFI and yYFI holders would most likely dramatically increase voter participation at IMO a marginal cost of voting dilution to YFI holders.
Incentives are aligned among yYFI, aYFI, and YFI holders. All want to see the ecosystem grow, expand, and succeed.
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My main concern is centralization, and double counting tokens make it easier. I would view this proposal a lot more favourably if this issue is solved.
That being said, the amount of capital one needs to duplicate enough votes to achieve 50% voting power will be 2.5*MarketCap+3 days interest, even if no one is willing to sell the attacker coins. It just doesnāt feel right that governance wonāt have a say in resisting centralization only because a whale said so.
Edit:
I want to add a few things
Regarding the attack:
In the event of a massive buy out, at the very least, a majority of YFI holders get compensated for selling their portion of YFI, and are willingly participating in giving power to a centralized entity.
However, since this attack can happen even if only a fraction of YFI is allowed to double vote. The attacker only needs to pay 3 day interest to the initial loan provider who holds a tiny amount of YFI (rest of the interest in duplicating vote is paid to the attacker itself), cheating the majority of YFI holders out of compensation for transferring power to the attacker.
The current market cap of YFI is around $700M, which makes the capital of attack around $1.75B. And a lot of companies have been bought out for much more. However, it does not mean the cost of attack is $1.75B. The cost of attack is actually almost negligible in gas fees and 3-day interest to the initial loan provider.
Regarding the response of being notified of a potentially catastrophic attack:
I find it troubling the first response to my concern from OP was indifference. A potential catastrophic failure being ignored by a being ruled as a theoretical. This is grounds for criminal negligence in the field I work in and could get your license revoked.
A risk is made up of probability and consequence (Risk=Probably*Consequence). When the consequence is catastrophic (approaching infinity), the risk also approaches infinity unless the probability is exactly zero (close to zero isnāt good enough). The solution is not to ignore it but to make sure it canāt happen in the first place.
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Bro this is such a convulated answer. Why donāt we just not break something thatās working. If you donāt want to be in the voting pool then donāt.
We donāt need more participation if people donāt want to stake and vote. The pool had around 10,000 stakers on the last vote so please provide incorrect numbers. It changes for the vote.
I donāt want us to start tethering with other platforms in the future as well and this thing becomes a revolving shit show as yearn grows.
Also, I have two accounts on here I have no idea how thatās possible, maybe cause I have one from the beginning or something.
How can we 100% know these are true people that bleed Yearn that are coming up with all these proposals. How do we know manipulation is not kicking in, especially if we add a more ridiculous way of adding more voters. Iām starting to get suspicious of a lot of all this as Iāve been ghosting the forums with my other account from day one and never inputed but have voted.
Iām only joining the discussion now as I think itās starting to get out of hand we are deviated towards greed and abusing the yearn platform. This does not set a good future precedent.
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Who cares about the technicalities of how this might work btw.
Maybe its not a good a idea and we donāt to analyze the pros and cons if you disagree or not. Youāll get suck in a rabbit whole and not think big picture.
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I agree with @Beepidibop. Sorry. I love the idea of earning YFI in yYFI but for the security of the community the two must remain separate and distinct.
No reason people canāt split their YFI positions if they choose. That said, I also think many are underestimating the magnitude of rewards that could be distributed.
In the end, risk vs. reward, but Iām for governance to stay governance and investment vehicle to remain an investment vehicle.
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i donāt think it is necessary that we have really high participation for all the proposals. I would think that for the most impactful proposals, holders of aYFI and others will revert back to staking YFI in governance to cast in their vote.
People using their YFI as collateral know how the game works so they must be prepared to exit some of their positions when big proposals are submitted for voting.
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A new Snapshot feature called Strategies allows voting with your YFI from everywhere while preventing double counting and force-voting with your YFI by malicious contracts and centralized exchanges. I think this alleviates most of the concerns. We are currently evaluating a massive governance reform, I hope to share the combined proposal verysoon.
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Read through a bit of the code. Am I correct in saying the snapshot takes the current available liquidity of the a pool (e.g. Aave) and divide it amongst the pool token holders?
For example:
- 100 addresses provide 1YFI each of liquidity to Aave, each of them gets 1 aYFI
- Borrower A borrows 1 YFI from Aave
- Snapshot taken
- Shapshot distributes the aYFI holders 1aYFI=0.99YFI of voting power
- Shapshot distributes 1YFI of voting power to Borrower A
- Total YFI voting power remains 100YFI
This would take care of the double-voting if my understandings are correct. Just need to make sure loan providers understand theyāre not voting with all the YFI they deposited, only the portion thatās not being actively loaned out.
Edit to add image of code in question:
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This is how it work with Balancer strategy (the one in the screenshot), it take the total token in the pool and divide among the pool token holders. With Balancer pool there isnāt this concern about double spend because the tokens counted are in the pool.
Aave created a space on Snapshot to enable both LEND and aLEND but it just use the basic strategies to take balanceOf these 2 ERC20 and doesnt take burrowed LEND into account see here: https://github.com/bonustrack/snapshot-spaces/blob/master/spaces/aave/index.json#L11-L28
If you want to remove the tokens that have been burrowed to avoid double voting you will need to create a custom āAaveā strategy for it. I can help if someone want to contribute to this.
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I see, so we do need to implement something on top of existing code to prevent double-counting. Maybe we should suggest this to the other thread.
link to BLabs snapshot develop branch:
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