Yfi_whale Meta Governance, Rule of Law, and Short-Term vs Long-Term Businesses

Meta Governance

We strongly urge the community to seriously consider the effects of Proposal/YIP adoption on the demographic of the YFI holders. When Prop 0 passed, we are sure that some of the Against camp sold their YFI which ended up in the hands of new or old holders more aligned with the For camp. This further skews voting on the emissions schedule to be higher than it would have been if the Against camp sellers had stayed. Consider the following example. Suppose there were only two YFI holders, Alice and Bob initially, each with 1 YFI (but Bob has an infinitesimal fraction more than Alice). Alice was Against Prop 0 and Bob was For Prop 0 and Bob wants an emissions schedule of 10% a year. Thus the average between the two would be an emissions schedule of 5% a year. Say that Prop 0 passes because Bob slightly outvotes Alice and then Alice, being disgruntled with the future of the project sells her 1 YFI to Carl who is more aligned with Prop 0 passing. Suppose Carl, like Bob, also wants a 10% a year schedule. Now the demographic of YFI holders has changed and their average emissions schedule is 10% a year rather than before when it was 5%. What this demonstrates is the danger of creating a bigger and bigger echo chamber as time moves on and those who fail to win on “voice” choose “exit”. This is why it is always important to compromise with the minority opposition camp on issues when the vote is very split. If we fail to stop this slippery slope to monoculture, we will be happily sniffing our own farts all the way until we finally drive this bus off a cliff.

Rule of Law

Initially, things understandably moved fast and governance took a backseat. In the long-term, we need to have strict rule of law. If the community votes for obviously bad ideas or in the case of Prop 1 fails due to quorum even though it is an obviously good idea, we should still abide by those decisions and just take the short-term pain. We should abide by strict rule of law even if it hurts us because setting a bad precedent here would irrevocably damage confidence in the project as it would reveal the governance process to be a farce. This is why it is particularly important to consider the deep ramifications of every proposal and to vote correctly. We should consider carefully not just the primary effects but also the secondary and tertiary ones.

Short-Term vs Long-Term Businesses

Yield farming is the craze right now and many of those projects have incentive programs built on unsound businesses. Meaning many of the projects out there (not all) are built as flywheels who can only grow by building more hype because it is all built on a foundation of vapor. We won’t mention them by name as it would be undiplomatic towards some of the community who are true believers in those projects. They are short-term businesses at best if not outright pump and dump schemes. yearn can be thought of as a project which exploits the incentive programs of other businesses to maximize yield (among other normal ways of optimizing yield). Our point is that a legitimate long-term business like yearn can be built on top of and as a meta layer on a mix of sound and unsound short-term businesses. We do not need to invent complicated self-pumping incentive schemes or flywheel contraptions to have YFI appreciate in value. yearn is a sound business in its own right. Whether we call ourselves Yield Farmers Incorporated or Yield Farming Inception, it is clearly a useful product for exactly the goal of farming yield. Let’s not confuse that with the idea that we might also need to have a crazy high farmable yield. In other words, you can use a shovel to dig for crops that you eat but you don’t need the shovel to itself be edible. We implore the community to seriously consider this and not vote for short-term pump and dump proposals. We can easily take YFI to 10x-100x if DeFi and CeFi fully adopt yCurv or yStables as the de facto quote, settlement, and collateral assets. And we get there because there literally is no better product. Andre built all of this initially for himself because it was actually useful. Turns out its quite useful for a lot of people. Turns out it could be quite useful for everyone in crypto. Let’s not ruin what we have by our short term greed. Think long-term.

yfi_whale - Member 02


I agree with this sentiment. And therefore I think we should preemptively discuss a plan for what will happen in the unlikely event Prop 8 passes. In theory we’d dilute YFI by 50% in a week, which is more than short term pain. Should we move to have a counter vote ready immediately in case it somehow passes? According to the model proposed we’re supposed to begin a weekly distribution of 15k in about 8 hours, lol

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I’m glad you acknowledge this. A lot of people were/are upset with how Prop 0 went down. Of course we have to find a middle ground but how is that possible with such strong voting blocks?

Makes sense to me, long term thinking should trump short term pumping

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