The proposal is very tempting in governance terms, I would admit.
Yet, to not distribute any CRV to such LPs would render the YFI community as a group willing to trade its integrity for benefits.
LPs of yVault prior the veCRV distribution snapshot and the yVault strategy Andre deployed are equally essential for such veCRV to have been brought in, especially when,as @TheSouthSeaCompany had pointed out, yVault was advertised with claimable veCRV:
Hence, a better way would be to split 50% of the CRV to this YIP, as to recognise the importance of the yearn ecosystem and promote its growth, while making the other 50% time-limitedly claimable to LPs of yVault prior the snapshot according to both LP proportion and time weightings, as a gesture of fairness.
And while I am being a buzzkill, apart from the moral issue, has anyone considered what legal exposure us yfi holders are taking on board with these votes? Particularly this one, in which promised CRV will not be delivered to people as promised, but instead dropped into our pockets?
Thanks for spearheading this proposal, Banteg. From looking at Curve’s guide and the github page on vote locking, the 1) voting power and 2) boost ratio calculations are complex and have several variables to consider to maximize our efficiency with the capital.
The voting power is not just a simple as (Yearn votes locked) / (Total votes locked). The voting power decays as it gets closer to the end of the lockup.
The boost ratio, with a min of 1.0 and max of 2.5, depends both on the amount of liquidity you provide and your voting power. In essence, the more liquidity you provide, the more CRV you need to vote-lock in order to get the max 2.5x boost.
Moreover, the price of CRV on the free market will also affect the yield and therefore, the strategy of the vaults. For now, Yearn’s guiding principle is to chase the best yield.
The worst-case scenario is that we lock up too many votes and the price of CRV drops to a point where we are not farming it anymore and are chasing the next best yield.
In order to maximize the efficiency of the funds, we should prioritize vote-locking up the minimum amount needed to get the full boost for the amount of liquidity provided. I also assume that since we are continually vested CRV, we need to have a regular schedule to determine whether to vote lock the newly vested CRV or to possibly delegate more back to original yVault LPs.
TL;DR. I am AGAINST this proposal. I agree with the spirit of the proposal, but not for 100% of the CRV to be locked. I would rather focus on smart, efficient vote-locking. This is possible because we are continuously vesting CRV. We need to figure out a mechanism in place for a daily/weekly allocation of the vested CRV to first get vote locked in order to continue boosting 2.5x and giving the best back to the LPs/treasury/YFI holders. If yVault strategy changes and we pull out the main yVault funds, it would be silly to continue to vote lock CRV for 4 years with no benefit. If it positively snowballs, we might end up vote locking all vested CRV for that time period and distribute none to LPs/treasury/YFI holders.
Finally, we also need to have a sub governance structure in place to decide how to vote as part of Curve’s governance.
Guys, we really need to have a lawyer review this. I certainly read this as “on approval”, in the sense that it had been approved, and there are tweets from yfi reps all over the place confirming that CRV would be delivered to the LPs. This is not the time to try and parse things so you can satisfy yourself that you aren’t robbing people. The question is whether a judge is going to see it that way.
Can someone explain how this affects users who participated in the Yvault? It was my understanding that the time locked early curve governance token would be distributed to those who participated in the Yvault. Are we now proposing that the people who actually provided the liquidity through YVault are not entitled to their portion of the early curve governance token? If this was the intention, early participants in the Yvault who took the biggest risk should have been notified so they had the option to remove their funds to farm CRV directly from a pool of their choosing. I hope I am misunderstanding this proposal. If not, then I will vote No. This would be a stain on the Yearn ecosystem.
YFI holders need to tread with caution here when they vote. Yvault participants are some of the earliest customers for this platform. Customers don’t have a vote. YFI’s long term success is dependent on customers. YFI holders who want to see long term success should vote with customers interest in mind.
I’m not sure robbing peter to pay paul is a good idea. The customers who participated in yVault and earned CRV are probably not going to be keen on giving their CRV to future customers of the yVault. Those early customer could easily take their CRV and lock it themselves or take the profits and buy more CRV to lock themselves and earn the full rewards. Option three is telling early customers that they are helping to fund profits for future customers, but I’m not sure I see what the benefit for early customers would be in doing so relative to just staking themselves. I’m open to hearing an argument for these customers I just haven’t seen it yet.
I think the vested CRV should be 100% distributed to all the LPs after 4 years vesting. YFI holders didn’t contribute the liquidity so they shouldn’t be entitled to any.
However, with the boosted CRV rewards, I think the current performance fees of 5% should be increased to 15%. YFI holders acting as a governing body should be rewarded handsomely for choosing the right farming strategy on behalf of the LPs.