Request for Comment: yToken Rebalancing Rewrite & Protocol Work Incentivizes


The current implementation of the v2 yTokens is severely under-optimized for the size of the pool now. It cannot split the token to multiple lending protocols. While this was okay when there were only $8m in tokens, this isn’t acceptable as moving $150m into a single protocol can crash rates since they are based on supply and demand (termed “interest rate slippage”). Additionally, it doesn’t take into account COMP, BAL, etc. earnings. The APR oracle is basically just ran by Andre right now.

My Background

I was a cofounder of We were going to do rate optimization (both lending and borrowing optimization), built the product, then pivoted. We were the only team that accounted for interest rate slippage accurately by doing off-chain non-linear optimization.

Driving Discussion

I want to open up a conversation of how to proceed to improve the UX via increasing the APR for participants.

To move us into this next generation, we would need an entirely new yToken contract and APR oracle. My suggestion is to have the APR oracle be governance controlled, and for there to be a new pool. In the short term, we could have the oracle not take any fee, in the long term, we could charge some sort of fee to cover the upkeep of the oracle and increase YFI holder APR.

I am a great candidate to spearhead this, and contribute our off-chain optimizer that is built in rust. However, I am not a YFI whale (though I wish I were), I don’t know that I would see enough economic benefit to splitting my time to working on it consistently.

That being said, where does this fall on peoples’ priorities? Would people be open to incentivizing protocol work (if not for this, anything people would be open to incentivizing)?


This would be a huge win for protocol revenue (pure yield AND governance token rewards such as COMP)

There is a currently a proposal out to set aside 5% of emissions for protocol use. I am in favor of that as there definitely needs to be capital set aside to fund future development.

This early in a project’s life cycle it is too early to completely decentralize so it would be quite prudent for the project to onboard full-time & part time paid contributors. Synthetix set a great model of this with striking a healthy balance between clear leadership, dedicated roles, DAO management of funds, and a mix of community/core team directing project buildout.

The roles required by the project include:

  • Project Management (Project Lead)
  • Partnerships
  • Researcher / Writer (need someone to lead documentation)
  • Communications
  • Front End Engineering
  • Operations
  • APR optimization engineering
  • Anything else supporting Andre’s/project development

Some of these roles can be filled by multiple people or one person fulfilling multiple roles. Also please comment what other roles the project could potentially need.

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Yearn is all about maximising yield. I’m excited about this.