on the crypto
Bitcoin may be the original cryptocurrency, but that doesn't mean major decentralized finance (DeFi) projects don't feel confident enough to stand out from Satoshi's vision.
Increase the supply of YFI
“We are not Bitcoin. This hard cap idea for start-ups is very romantic but not necessarily the best execution path for maximum value, ”wrote a participant in Yearn's governance forums on 13 January.
The Yearn community is evaluating the sentiment around the decision to increase the supply by 22% with an additional 6.666 YFIs (worth about $ 200 million, at current prices), one third of which would go to the main contributors and the rest would go to treasure. If sentiment looks good, it will be written as code and voted on-chain using the Snapshot governance app
. Not everyone is happy with the new developments, of course. At least two YFI holders announced on the forum that they could no longer participate in a protocol that did not honor the social contract.
Social contract
And it's not entirely unfair that some see some sort of contract. Last year, Cronje himself made a proposal to stop minting YFI and it looked like it would pass. Over 90% of voting tokens supported it, but less than 15% of existing tokens took part and voting was never implemented.
However, users have always rated the sentiment and not the actual code. “What we had in September was a classic case of stakeholder mismatch in the YFI community,” said Spencer Noon, of Variant Fund.
"Burning the keys would likely have caused YFI's price to appreciate in the short term, but potentially at the expense of the long-term sustainability of the project." Yearn's governance processes have become more formalized since those early days, but the confusion surrounding this decision persists.
Oh BABY
Last September, Placeholder Joel Monegro wrote a post urging communities to consider a “buyback-and-make” approach to using the platform's profits, rather than “buyback-and-burn”.
Taking this request to heart, the Yearn community brought forward a Yearn improvement proposal called Buyback and Build Yearn, also called BABY. It was approved with 99% but less than 10% of the YFI votes. BABY would use Yearn's profits to buy YFI on the open market and use it for contributor rewards and other Yearn initiatives.
Previously, most of the revenue was distributed to YFI holders aiming for governance, but the earnings for doing so were quite low. Yearn is currently earning around $ 100.000 a week in commissions and some say this might be better reinvested in Yearn himself.
However, the community idea seems to be that BABY itself is not enough to keep the team central. "In my opinion, this is another example of YFI having one of the most robust and prudent communities in all of DeFi," Noon added.
