Every staker is responsible in aggregate for making good decisions, including debating and voting on proposals like this one. There are many moving parts and anybody can propose a strategy. Stakers are the ones who assume the OUTCOME of those decisions (the market will reprice YFI and users willleave damaging future revenue in the event of a misjudgement). Stakers in YFI == Miners in PoW, they are punished for bad decisions by the market.
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This is true and it’s clear that stakers should be compensated for this service. However, it’s not clear to me how this group’s contributions are much larger than the contributions of strategists. And I say this as a long time staker and voter.
Yes but although anyone can propose a strategy, they are only getting compensated if that strategy is adopted and is generating a profit, which is a much higher bar to clear.
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The 10% to the treasury is of the total, not of the 20% performance fee. Half of the 20% performance fee goes to the treasury. See:
For clarity, I will write your equation in two ways:
$38,121,301.97 * 20% performance fee * 50% to the treasury * 80% to YFI stakers = $3,049,704.15
$38,121,301.97 * 20% performance fee 10% fee to the treasury * 80% to YFI stakers = $3,049,704.15
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Thank you. I have corrected the error in my post.
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I am in favor of this proposal, as a holder and long term contributor, this will lay down the foundations for a more sustainable ecosystem, with more contributors, more strategies, more incentives to attract talents etc… And ultimately better sustainability and compostability.
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There is no distinction, if people work on strategies, they get onboarded and get all the help they need.
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Yes, what I meant is exclusively protocol-level risk. I think it goes without saying that price risk is real, as is risk of steering the protocol in the wrong direction.
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I think this a great proposal and I am definitely for it. No real suggestions or changes:
There are 4 key actors in the yearn ecosystem.
- Yearn contributors ie:the people that build/support the yearn ecosystem.
- The strategists
- The YFI stakers
- The YFI holders
The yearn contributors and the strategists are clearly the most important.
ON CONTRIBUTROS - I have been worries for some time that the contributors and particularly the core contributors are not being properly incentivized (grants in stables at the current level are not sufficient). For all those YFI holders, ask yourself why doesn’t @banteg or other core contributors just walk and start their own yearn fork where they take some dev share? There is nothing stopping them aside from ‘sweet talk’. These guys need to be properly incentivized (with YFI) and the 20% contributor reward pool is exactly what is needed. Since @banteg et al proposed it, it actually gives me a ton of comfort that he is saying what he thinks a core contributor needs to align long term incentives. I am 1000% for this.
ON STRATEGIST - With the core contributors properly incentivized everyone really needs to understand how important the strategist are in this whole thing. Yearn builds the tools and the strategist uses them to make profit for the ecosystem. It would be like constructing a stadium with no players to utilize it. Without the strategist properly incentivized there is no product. For those of you arguing 30% vs 36% its sort of semantics. I would err on the side of over compensating the strategist if anything. This level is not set in stone. We can always change it later, but let’s get the biggest brains to work in the yearn ecosystem and properly pay them. I’d rather get a smaller percentage of a larger pool of fees than a higher percentage of nothing (I know this is hyperbole but making a point). 10% performance fee seems right. It is a ton of work to build a strategy and test it given everything is open source and can be copied the next day.
ON YFI STAKERS - You have to participate in governance. This proposal accrues fees (in the form of YFI to stakers which gives YFI value and creates stability in protocol governance. This proposal is totally fine with me. If you don’t want the YFI, sell it when you get it. It makes the yfi stakers have to opt-out which I assume most will not. The right default.
ON YFI HOLDERS - You accrue no cash flows. You are not providing any value to the ecosystem, just free-riding. Feel lucky to get any appreciation associated with the protocol.
The price will work itself out. If we get the incentives aligned properly, AUM will flow in, fees will accrue and price will reflect that. A virtuous circle. Let’s get this passed and implemented.
Also I agree we need to keep the treasury buffer at least 80% stables to keep the 6 month budget in-line. I suggest we keep 6 months of operating expenses in the treasury = 180*6 = $1,080,000 (80% or more in stables and 20% or less yfi). Wouldn’t be opposed to 100% stables in treasury. Would hate to lose a month of op-ex because of YFI price decline. Probably when you need the cash the most.
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I have been censored for disagreeing with this proposal.
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First. Thank you @banteg for putting this together. Excellent discussion here. Best in fact that I’ve read in a long while.
A point of view I’ve not yet seen being brought up: In regards to the number if individuals that fall into one or more of the described buckets.
I imagine (& hope) there will always be far more people in the staking bucket than the other two combined. Agreed?
If so. The % earned by individual strategists and participants can and I believe will be considerable. Which currently makes me align with @captainobvious % breakdown.
30% divided by 30, 40 or 50 strategists will yield far more lucrative returns than 60% divided by 1,000, 2,000 or 3,000+ stakers
Sorry to add yet more complexity, but i feel its a valid addition.
Edit: seems my auto correct wants to convert stakers into stalkers. Lol.
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You’ve been censored for making personal Ad hominem attacks, as mentioned in the forum FAQ here: FAQ - yearn
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Pointing out conflicts of interest and moral violations will be labeled ad hominem and censored in this community. Noted.
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I just think if they require more resources to hire, they should create an explicit budget for human capital and we can vote on that once per quarter. No need to leave it up to the volatility of AUM and vault use…etc.
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What did you say that got removed? DM me please.
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It’s not removed, someone just flagged it.
Okay, here is your conflict of interest disclosure, I belong to the following groups:
- Contributors. I’m one of the first contributors after Andre, been with Yearn since day 2.
- Strategists. I’m making and breaking strategies as a part of development process.
- Stakers. I hold quite a bunch of YFI and am interested in growing its value.
But is anything of this really a secret? How does it contribute to the discussion?
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Contributors and Strategists should ideally WANT to become stakeholders to further align incentives meaning they should be attracted to hold YFI in the vault/governance contract, not just get paid for their services.
Paying them in yYFI aligns this. A vesting schedule is even better.
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His message “The fact that you can’t comprehend basic game theory where the YFI price is an important moat around the protocol tells me all I need to know about the direction of this project. This feels like intentional developer sabotage.”
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I am in favor of this proposal, excluding the issue of proportionate fee allocation to stakeholders, going to a vote ASAP, immediately followed by a second vote on the proportionate allocation of fees to various stakeholders.
super interesting discussion here. Can wait for a vote on that and see how the community reacts. I’m sure a lot of people don’t comment here but are interested about those changes.