[YIP-74] YFI Wintermute Loan & CRV Plans

Hey everyone, thought I’d give more color of our thinking process and what we are trying to achieve here. Big fan of Yearn by the way:)

As part of CRV bailout of last week, we need to find a way to lock part of our CRV and ideally get yield on it. Bonus points for being able to vote with it (as I think there is good chance curve wars are coming back)

We’ve been primarily looking at yCRV and cvxCRV. Trade-offs we face:

  • Best thing about yCRV is we’d be able to vote at some point in future. Slippage however is pretty bad
  • cvxCRV is just yield, but very reasonable slippage
  • yield is pretty much similar between the two

Slippage is big consideration for us – we don’t want to sacrifice a big chunk of the yield in future if/when we want to exit. And, to address some of the posters before, I actually think it’s a very significant problem for yearn – you need to get this critical mass of liquidity to attract more liquidity, otherwise everyone will just go to Convex

At the same time we are trading YFI across cefi/defi/otc and could really use more inventory. Buying it from the market is just not in line with our market neutral mandate – we have no opinion on where YFI is going direction wise. So, combining all this, we thought about this creative solution – exchange our liquidity for yCRV/CRV for a loan in YFI (that would be rather stupid for us not to return, given the size of Wintermute at this stage), so that everyone wins in the long run.

And maybe it can be the catalyst to attract even more liquidity in future as slippage would drop quite a bit with us entering the pool

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