Title: Transfer Budget Approval Authority to veYFI Holders
Abstract
This proposal seeks to transfer authority over budget approvals and payment requests from the current 4/7 multisig team model to veYFI holders, ensuring direct DAO oversight, transparency, and resistance to centralized collusion. All budget requests and disbursements from Yearn Treasury will undergo public discussion on a dedicated sub-forum and be subject to a binding Snapshot vote by veYFI holders after a 7-day review period.
Motivation
The current budget approval process lacks transparency and decentralization:
- Opaque Team Votes: It is unclear which 4 of the 7 teams approve/disapprove requests, creating accountability gaps. Moreover there is a theoretical risk that teams could collude to approve each other’s budget requests, potentially leading to misallocation of funds.
- Centralization Risk: The 4/7 model risks collusion among teams to approve mutual budget requests without community input.
- DAO Misalignment: Yearn’s ethos prioritizes decentralized governance, yet critical treasury decisions remain under centralized control.
- Transparency Deficit: Contributors and stakeholders deserve visibility into how funds are allocated.
By shifting authority to veYFI holders, the DAO reclaims sovereignty over treasury management, aligning with Yearn’s progressive decentralization roadmap (e.g., YIP-81).
Rationale
- Transparency: Public proposals and votes ensure stakeholders scrutinize allocations.
- Anti-Collusion: Eliminates centralized gatekeeping; veYFI holders are incentivized to act in the protocol’s long-term interest.
- DAO Empowerment: Aligns with Yearn’s vision for fully on-chain governance (YIP-81) and veYFI utility (YIP-73).
- Accountability: Clear audit trail of approvals/rejections via Snapshot and forum archives.
Specification
To execute immediately upon passage of this proposal:
- Remove authorization of yTeams to approve ongoing/new Budget requests
- Close all unapproved budget request at GitHub · Where software is built
- Budget Request Submission:
- All budget/payment requests must be posted on a dedicated sub-forum at gov.yearn.fi (
Budget Requests) with:- Clear purpose (e.g., development, marketing, audits).
- Amount requested (in USD or YFI).
- Justification/metrics for expected impact.
- Payment address(es).
- All budget/payment requests must be posted on a dedicated sub-forum at gov.yearn.fi (
- Discussion Period:
- Requests remain open for community feedback for 7 days.
- Teams/contributors may respond to questions or revise proposals.
- Snapshot Vote:
- After 7 days, requests proceed to a Snapshot vote open to veYFI holders.
- Approval requires:
- Majority support (>50% of votes).
- Minimum quorum (e.g., 5% of circulating veYFI).
- Execution:
- Only VeYFI voted budgets and disbursements will be queued for execution by Multisig
- Update Yearn documentation to reflect above changes.
Risks
- Voter Apathy: Low participation could stall critical budgets.
- Mitigation: Set low quorum thresholds initially; incentivize voting via veYFI rewards.
- Slower Process: 7-day discussion + voting may delay urgent requests.
- Mitigation: Allow expedited votes for time-sensitive needs (e.g., security emergencies).
- Complexity: New contributors may struggle to navigate the process.
- Mitigation: Publish templated guidelines and host office hours for support.
Conclusion
This proposal strengthens Yearn’s governance by ensuring that veYFI holders, not centralized teams, control the treasury. It eliminates opacity, reduces collusion risks, and reinforces Yearn’s commitment to decentralization. By adopting this model, Yearn sets a precedent for DAO-led financial stewardship in DeFi.
- For: Implement decentralized budget/disbursement approval by veYFI holders.
- Against: Retain current 4/7 team model.
Note: This proposal complements existing processes (e.g., YIP-81 on-chain execution) and does not affect non-budget governance decisions.