YIP-51: Set Vault v2 fee structure

Proposals YIPs
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22

Voting is live
https://snapshot.page/#/yearn/proposal/QmSaYHR97LDMDvg9xeTfdNZw6aqL9njxBKM6JVFtCYxKvB

2 Likes
23

Very clear write up and rationale. Good work.

Happy to support. But wouldn’t mind more info on how we can deal with potential competitive pressures from copycat projects. Cheers

24

While I’m not happy with the 2/20 structure, I think this is in the right direction and a better structure than the current 0.5% withdrawal fee.
I will vote yes but look forward to adjusting these values in the future, especially with lowering management fees as TVL grows.

5 Likes
25

okay thanks for clarifying… i thought this was going to be your proposal stripping the strategist rewards (which I was in favour of), cheers

2 Likes
26

Thank you for all the effort here. I happily voted FOR.

27

I happily voted For as well - thank you @banteg!

28

Voted FOR! Looking forward to see the future of Yearn :slight_smile:

2 Likes
32

Voted FOR. fully support this step, and will also support increasing strategist rewards in the follow up vote. Huge thanks to all the contributors for their legendary efforts! We appreciate you.

33

Voted For. Excellent work team.

Can we consider a Costco membership model? For those that never been to Costco, Costco is a wholesale retailer and they require a membership to shop there. However, there is an executive membership that cost $120 option which returns 2% cash back on purchases. Basically, if you go to Costco and spends more than $3000 a year, it is a better option than their base tier $60 membership fee. If you spend more than $6000 a year, you essentially would pay for the membership from the 2% cash back with your savings.

I think we should consider requiring depositors to at least own 1% of deposit value of YFI as “membership”. This will promote a “we are in same boat” mentality between depositors and contributors. This type of ownership mentality would help the project become more decentralized also.

2 Likes
34

I can only agree more.
Cashback membership with more skin in-game for all stakes and yearns enthusiast activists.
That’s the true spirit ethos.

35

This act of membership in actual substance is whale-forming. Community must be inclusive.

36

As a “normal” DeFi user (so take my POV with a fair amount of salt), I strongly oppose.

TL;DR:

  • Consider reducing overall fee target in order to foster longer term Vault growth
  • Get rid of the management fee (or reduce it to be a token amount).
  • [Maybe nice to have] Consider retaining some small deposit/withdrawal fee to discourage short term trading in Vaults (or consider renaming them).

While the new model in principle seems to meet the requirements, the actual fees required to replicate the current fees are exorbitant at 2/20. This is on the higher end of what legacy funds run by full-time, highly paid professionals charge. The 2% management fee in particular is supposed to cover the salaries & overhead expenses of running a VC/PE/Hedge fund. While there are certainly a lot of brilliant people contributing to this community, a 2% management fee seems hard to justify- and to an extent contrary to the DeFi ethos of “unbank yourself”. One of the main reasons I’m in DeFi is to not pay exorbitant management fees in particular.

One nice thing about the existing vault structure is that it does penalize people who move money in and out frequently. Good! That actually matches a user’s expectation with the term “Vault”. Switching to a VC model, might as well rename “Vault” to “Fund”.

I’d also respectfully ask the community whether retaining the same existing fees should be a goal at all. The existing fees may be unsustainably high due to a current focus on short term trading in DeFi. As the ecosystem matures, I’d expect more long term (e.g., deposit and hold) trading. Attempting to engineer a fee structure to match the current artificially inflated fee seems to be sacrificing the long term attractiveness of Vaults as a widespread investment vehicle.

One final question- if the fee structure ends up being very high (like 2/20), doesn’t that create more incentive for another community to essentially fork the system but with much lower fees? In some ways, Vanguard did this to a lot of the active funds (which were charging 1.5, 2% AUM fees) and drove down costs for the entire industry while picking up a ton of users. Given how it’s even easier in DeFi to copy a business model, perhaps this is another reason to err on the side of long term growth vs. short term gain.

My 2c. Hope this helps!

2 Likes
37

Voting is concluded with 99.74% for.

2 Likes