This proposal would change the rewards for governance staking YFI from yCRV to increasing YFI shares by purchasing from the market and adding to the staking pool
Currently the governance staking model rewards stakers with yCRV as a cashflow incentive. I believe that the tokenomics of distributing YFI instead would provide better yield for the governance holders and would better fit the emerging ethos of the yvault products.
Currently, the yCRV rewards are quite small in comparison to the overall appreciation of the YFI token. Most folks who are purchasing the YFI token are doing so on a speculative basis, not for any real desire for governance. These yCRV distributions are currently not a significant incentive for participating in YFI governance.
I believe that if we change the governance reward to increasing holder’s position of YFI instead of yCRV this will have multiple benefits: increasing purchase pressure on YFI, further incentive for YFI holders to stake their shares and participate in governance, and less volatility of YFI price. Purchasing YFI from the market to add to the staking pool would work akin to stock buybacks, driving share value higher. Requiring YFI holders to stake their YFI to participate in governance and receive these rewards will further increase governance participation, and the act of staking YFI will reduce overall market availability. This will create a virtuous cycle of increased value for both YFI holders and for the ecosystem at large.
For: Would replace yCRV distributions for YFI staking and replace with an accumulation of YFI instead
Against: Nothing changes. yCRV distributions continue.
- In Favor