Yes we need to have trust worthy figures with solid connections/deal sourcing jumping in the game…there could be a vault for each selected individual(like a lead syndicate on angel list)… or a single vault managed by a group of selected comitee members…and probably a clear mandate on what kind of deals the members need to focus on…
yes agreed the community vetted committee members would need to be left alone to operate freely and move fast… they can provide periodic investor update for the community.
This could be a good idea. As before mentioned the YFI community has some of the best minds in the Defi Space. But to make lasting returns in the VC business there is just some stuff that has to be followed.
I don’t think this can work out without at least 1 full-time Fund Manager. (Probably needs 2 more analysts regarding the size we talking here).
For Venture Capital to be profitable you normally would need to invest in multiple opportunities to hedge against the risk and typically a single successful investment pays off the whole fund.
How will governance be done? How many shares is the fund going for? Who is doing the legal work (need to have some funds for that)? So this is nothing to be implemented quickly.
I think a fund like this would be a legal and tax nightmare to operate and thus I expect the quality of talent attracted to be quite low. I think a more valuable idea would be to offer the community up in terms of liquidity and support. By building the right partnerships we can enable wider token distribution through early vaults, something that will add value to both the project by supported and YFI holders themselves. This has an additional benefit of increasing fees too.
The downside to this is reputational risk, however by not supporting the unaudited rapid launch projects like YAM and supporting longer term sustainable projects Yearn can become a major player within the space.
For example, we could use the YAM model to build a treasury, this treasury can then be used to pay for audits for developing projects and in turn Yearn gets the ability to launch Vaults on release. The partner project can even allow for special terms such as vesting, in order to focus on longer-term sustainability. Yearn can easily become the de facto launchpad for the defi space, hopefully the upcoming token economics review will further enhance our ability to add value to developers that want to focus on developing.
I also think during the early stages of YFI it makes sense to keep almost all activity on-chain. The co-ordination problems for offline tasks tend to be opposite of the “don’t trust, verify” nature of crypto.
YFI holders have also shown an appetite to seed new protocols, yam being an obvious one but even Cream.finance and other smaller projects have managed to capture % points of YFI supply. I think it fits better in the general ethos of Yearn to do it in this way.
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Yes if setup like a traditional fund operation…there would need to KYC/AML for the LPs in the yVCVault which can be both a technical and logistical road block at this point. But if there are people that are interested in thinking this through and finding solutions we should be open to it…but definitley a longer term play. The more immediately approachable problem could providing community backed launches for liquidity farming…which would also be our strong point.
We could have different groups of interested people working/thinking about each of these verticals.
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If we start going in this way i m out .
That then another ‘game of whale’ starts as Gaz fee-only with accredited VCs and hedge funds to be on tables as usual. Then good luck.
Love this!! You are spot on. We have a unique niche that we can capitalize on. Since yearn is a community founded on the ethos of fairness/yield farming we are in a great place to do this. Its a big win-win.
Combining yVaults for launches would we a very unique and powerful way to support new projects.
Yes by doing this we can reduce the risk for the whole yeild farming community…if we only back high caliber projects that solve an important pain points for the space we will start to attract larger capital pools that have been sitting on the sidelines…
We are just breaking down different parts of the problem to make an informed choice…i would think most lps would not be interested in this…might make sense to keep things mostly online at this point…
For the tax and legal angle, maybe the VC legal entity could simply be incorporated in some zero-tax / minimal red-tape jurisdiction like Seychelles or Nevis?
so the idea is that there’s a yVault whose funds are deployed by an appointed team?
i think it sounds like a bad idea, a distraction and a move away from what has given yearn product/market fit.
i invested in iearn on day 1 because i recognized the simplicity in andre’s ethos – a simplicity which has led to good returns and low risk. fully on-chain, predictable strategies.
vcVault seems like a step away from that and i’m not in favor at all.
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fair enough waiting for your proposal
The idea is to find synergestic ways to add more fees/value to the yearn ecosystems…nothing has been finalized yet…just an early brainstroming thread. The cool thing about the decentralized way the yearn is setup is that unlike a traditional team which has a limited number of team members…we are not taking resoruces away from our core focus…Andre and the devs are laster focused on the key areas …these are just other community member stepping in to explore other areas for future value add…this the true power of DAOs imho…
You could approach this as well with tokenomics and just lock in some native tokens of the funded protocol. But this has downsides as well. It makes a premine mandatory which would be a step backward and it requires a native token which disqualifies potential cool options. But I get where you coming from. KYC and paperwork doesn’t sound like what we are here for.
yearn’s always been about simple, on-chain yield aggregation.
a vcVault would be way outside that core competence. vc would require intricate off-chain, human coordination. it’s like macdonald’s getting into fine dining.
a more “yearn” thing to do would be to look at all the different on-chain fund management protocols and find a way to skim their top returns. protocols like dHedge, Melon etc. there could be a vault which, for example, takes momentum positions in top performing funds. not thought through, obviously – just an illustration of what i feel fits the bill as a yearn product.
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Agree - I think finding consensus among 20-30 people on early stage deals is antithetical to quality investments
The great thing is… if you don’t like it you don’t have to put your money into it!
The vcVAULT is about breaking the link between CeFi and DeFi.
Why would 1inchexchange take money take 2.8mm from investors (source) when they could have easily gotten that from DeFi.
Shit people are going to throw hundreds of millions at Pasta right now!
And even better than just taking cash, 1inchexchange could have gotten $yUSD to fund anything and everything they need.
Then distributions or tokens come back to DeFi (everyone who invested in the vault).
Look… this thing will not be easy to figure out. It hasn’t been done before. It’s bold as fuck.
But if you really want to change the world, you need to do all of the above. Clearly Andre is taking that kind of action, can we match it?
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The multisig committee would have to be very respected and have a proven track record of competence and most of all honesty.
Even with skin in the game, what’s stopping them from funding their friends (who could very well do a decent job) over the best possible choice?
How would we keep this from circle jerks and pats on their own back?
There is so much more core fundamentals to explore and polish before we even need to begin to explore breaking into CEFI. We really should focus on the core unique selling point of Yearn before trying to do more.
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But the vcVAULT would have a big effect on YFI if it doesn’t work out. Even if he doesn’t put any money into the vcVAULT it would affect on his YFI.
I’m taking a guess, but he invested in YFI because it was Andre’s original intention to have a low to no-risk, passive method of increasing your portfolio – stablecoins, yield-finding strategies. Something he could easily recommend to his friends.
The vcVAULT definitely could be very profitable, but it’s far from low-risk.
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You have to have absolute faith in the group for you to put your funds in.
If you don’t, then you pass on it.
If the investments do not work and all fail, then people who invested in the vault will lose.
If the investments work, then the people invested in the vault will win, the fund managers will win and $YFI holders will win (fees).
Not easy. Hard as fuck.
But if we turn YEARN into an angellist… oh baby.
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I’m in for this. incredible platform