1/7/2024 0 Comments Yfi tokenomicsThis would equate to 1,100-1,400 YFI per year at a YFI price of ~$30k, or somewhere around 100 YFI/month. Now that the yvDAI debt has been paid off and the bear market buffer exists, Treasury expects to be able to direct ~$35-$45m to YFI buy-backs on an annual run-rate basis assuming TVL and margins stay constant. Despite saving more than $40m, the Treasury has still been able to buy back ~300 YFI year to date at a cost of ~$10m equivalent. While the details can be found in the quarterly financial reports the high level summary is that Yearn has gone from $11m in debt in February to $30m+ in liquid assets in November. Since then, the Treasury has been on a path of recovering from this expense while at the same time saving for a potential market downturn and a prolonged bear market where a runway would be required during periods of lower protocol activity. The Treasury compensated those affected, making vault depositors whole. A few weeks later, the yvDAI vault suffered an incident where 11m DAI were lost. YIP-56: Buyback and Build (BABY) was adopted in early January 2021, instructing Treasury to buy back YFI with excess Yearn treasury tokens. This proposal attempts to bring together the discussions that have occurred over the last 2 months. There were also multiple independent groups created with high degree of engagement, culminating in a signalling vote which aligns with the components of this proposal. A discord chat gave those interested an opportunity to express their views. Over 200 people completed a survey aimed to express the preferences of YFI tokenholders, results of which can be found in the References section. On October 6th 2021 there was a call for tokenomics ideas on Yearn’s governance forum that attracted over 5k views. Namely the community exploration of various tokenomics ideas, the source and quantity of YFI rewards proposed to be used, some general information about Curve’s ve-mechanic, and what was deliberately kept out of scope of this proposal. This section covers general information that readers may find useful in order to better understand the motivation and specification of the proposal. Restrict the YFI eligible to vote in Yearn Governance as only those staked in xYFI (from Phase 1 and onwards) or vote-locked in Yearn (from Phase 2 and onwards).Give the mandate to Yearn Developers to roll out the above components at their discretion as and when they become feasible.Expand the duties and responsibilities of veYFI voters, and their locked YFI, in exchange for earning additional protocol rewards. YFI are allocated to gauges based on weekly governance votes. Introduce vault gauges where vault depositors stake their vault tokens and earn YFI rewards according to their veYFI weight. An early exit from the lock is possible by paying a penalty that is rewarded to the other locked token holders. Introduce ve-style locking of YFI (veYFI) for up to four years (exact max duration tbd), where a longer locking duration gives a greater share of voting power and share of YFI rewards. Distribute YFI that’s been bought back with Treasury tokens as rewards in a YFI vault. These build on top of each other and thus come in a particular order: Evolve the role YFI plays in Yearn Governance through four distinct components.Direct a portion of YFI that is bought back by the Treasury as a result of BABY as rewards to those YFI token holders who actively participate in Yearn Governance.You can learn about our voting rules in YIP-55. This proposal is currently in the voting phase. Yearn.Authors: daryllautk, HAtTip3675, SummaryĮvolve the role YFI plays in Yearn over four distinct phases, cementing the vision of the token as the fundamental foundation of governance.
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