Is the idea that “stakers bear zero risk” your official stance now? It’s objectively incorrect, just to be clear. Price volatility, YFI price depreciation/stagnation are all risks stakers are exposed to, by definition of being holders.
But seriously, if you’re going to say something like that, why not lean into it and propose 0% going to YFI?
How do you see this happening? Like with an insurance fund for any issues with the protocol?
Also a valid option. In my view, the system should reward holding the asset because ALL participants, whether galaxy brain or not benefit. The galaxy brains are doubly rewarded because they realise the best way to maximise their income is a) work for the strategy b) work for the contributor and c) add value to the stakers to supercharge their incomes.
This is how you maximally align incentives whilst also diluting individual but concentrated incomes in voting power.
Ryan’s proposal says exactly that, but imo it’s too contentious. I don’t want a schism in the community.
Yes that would be awesome
The risk is protocol shits itself and a) price craters and b) dividends cease to come in. Minting YFI is a non starter given the vote for doing so and is generally a crude approach that introduces liquidation and auction complexity. Support valuation == stronger system overall.
So, just to be clear, you are asserting that stakers bear zero risk, despite easy verifiable examples of risks to the contrary, and are pointing to Ryan’s proposal as support for your stance?
Show me how the protocol is dependent on YFI price and how it puts it at risk. 1 YFI = 1 vote, that’s it.
Didn’t ask about the protocol. This is with regards to the stakers bearing zero risk bit.
Are we saying stakers (as a set of economic participants) are synonymous with the protocol now?
Where’s the value in ignoring the YFI price as a reflection of the community’s health and vigor?
The counter point is strategists holding the protocol hostage because they have galaxy brains and vote to either walk or increase their share to 36%. The Staking portion is the balance to this counterweight and should never be less than ~55%. It is what gives people a reason to pay attention and hold the token. The higher the price the harder it becomes for whale manipulation and centralised capture. It makes it a DAO rather than an oligarchy.
I personally see the value of Yearn in the following:
2 questions, I haven’t followed V2 closely, so these might have already been addressed elsewhere.
Is V2 using keep3r to execute functions?
Are gas fees taken out before calculating performance? Because the old model never accounted for gas in calculating the performance and was subsidizing gas with the “performance fee”. This issue has to be addressed especially if V2 is using keep3r. We need a clear fee structure for gas costs or yVault jobs might become gameable on keep3r.
Yes, we are experimenting with keep3r, see this repo.
https://github.com/lbertenasco/strategies-keep3r
No, because it’s not possible to reimburse failed transactions on-chain and not possible to prevent keepers using the inflated gas price to get more compensation. Keep3r is using a gas price oracle for the second part. Imo this hasn’t been solved well, that was one of the reasons for the strategist reward bump, with the assumption that strategists will tend to their strategies.
I agree for the most part, but any proposal that rewards stakers less than they are now should be shot down out right. It is concerning that the programmers that are getting fees to work on the protocol want take more in compensation for their proposals when they are being compensated to work on those already. Also, a lot of the proposals get shared for outsiders to use, when they should belong to the YFI holders and not be an open book. We need some heavy YFI holders to get this under control.
The strategists and developers certainly deserve more than they are getting right now, I agree with the proposal on this and by a fairly consistent margin. What I oppose is going too heavy (at least initially). Reward more but to align incentives, the devs/strats should ALSO WANT TO STAKE. If that is not the case, we have a problem in the balance.
All the params are customizable by governance. It’s hard to foresee what works without trying it out.
Agreed. I think most who ‘get it’ realise that strategists and contributors need a larger slice. Stakers in my view should remain the dominant portion, 55-60% feels like the correct balance. Slicing up the remainder between contrib and strategists is something that could be re-worked depending on the inputs however both should be incentivised to stake and thus add value to the PROTOCOL rather than get paid out up front without any desire to bind capital to the success of the protocol. They should WANT to stake and thus adding value to the staking portion via their work and contribution is a win-win (aka aligned incentives for longevity).
Personally, I think there are risks to being a YFI holder and ecosystem participant (being a holder does not imply you are a participant, but if you want to maximize your return what exactly are you adding to the equation?)
Perhaps this discussion got a little off topic, but I think it’s important that we stay grounded in what we envision for ourself and this community. I think this proposal aligns itself quite well towards the goals I see for it. We can argue numbers from now to the end of time, but overall it’s important we get the structure right first.
We can always tweak numbers later, once we have better data.
I agree the gas situation has not been solved well.
I’m gonna focus solely on aligning the interests of the strategist and treasury for this reply. Since I don’t really know how to account for failed transactions yet.
I don’t know if this is implementable. But maybe there can be a set gas sub % based on gross growth, but with a preferential treatment for the strategist.
For example, a gas sub of 5% if called by the strategist, but 2.5% if the function is called by anyone else with the left over 2.5% going back into the vault.
This gives the strategist an advantage at maintaining his strategies for a profit, since it will always be more profitable for the strategist himself to maintain a strategy compared to anyone else. This avoids the scenario of a strategist abandoning his project which offloads gas costs to the treasury, but still gets half of the performance fee (when part of the performance fee the strategist gets is supposed to be gas sub).
Ex.
Performance fee of 20%, which can be broken down to:
The green column represents a Goldilocks zone where it is profitable for the strategist to maintain his strategy, while being unprofitable for anyone else to do so. Day 3 represents the day when it is breakeven for anyone to call functions, eliminating the scenario of gas subs coming out of the treasury.
This does a few things:
Lastly, it doesn’t have to be 5%/2.5%, the proper ratio should be up for discussion.
That’s a very interesting concept, there could be some backstop system, which prefers e.g. strategist, keep3r network and then anyone.
