Incentivizing incentives for additional Yield Tokens

Summary:

Distribute system rewards (not YFI) to tokens that bring in additional AUM and fees.

Abstract:

Pink YFI has done something I find very interesting, and would like to support, they gave access to a whole demographic which would otherwise be excluded, they represent the voice of their community, they increase AUM of yearn.finance and by extension the system rewards.

This made me think about the concept of incentivizing other communities, including pink YFI, to do the same. The system can assign a subset of the rewards generated to be streamed to the relevant AUM provider. So in this case, rewards generated by the AUM of pink YFI, is streamed back to their governance. This creates further reward incentives to help their community engagement, but also provides them additional engagement motivation.

Motivation:

Foster stronger relationships with other communities, and empower them to grow their own communities.

Specification:

Add another downstream recipients during reward distribution based on AUM contribution.

For: Add incentives for future Yield Tokens

Against: No incentives for future Yield Tokens

Poll:

  • For
  • Against

0 voters

27 Likes

100% lets do this sounds like an awesome plan.

15 Likes

If I understand it correctly:

We would pay a % of fees to protocols that we are farming, because they are providing a product for us to profit from?

i.e we pay COMP holders a % of the fees we make from comp mining?

Sounds interesting, but does it benefit YFI?

If not, and someone cloned YFI but without this % gratitude fee, would they be more attractive than YFI for farmers? These are permissionless protocols after all.

[My mind is open / naturally inclined obviously to agree with whatever Andre says , but I’m trying to get to the bottom of this ]

8 Likes

I think the YFI platform gets a cut of people farming ycrv if I am not mistaken.

4 Likes

Collaboration > competition. Empower YFII to hunt AUM for YFI. Less work, more fees. All for it.

Tbh this further establishes YFI as the yield aggregator, and is great for the overall ecosystem.

How can this be done in a way that doesn’t expose LPs to increased risk? Each new sub-fi would be security checked and approved?

Also, what is the proposed incentive / fee split?

12 Likes

I think this is a great idea, as it will create a reward loop between YFI and YFII. It will work like this:

  1. YFI community deploys a yVault which farms YFII and earns returns on that
  2. Some of the rewards are streamed to the YFII holders
  3. YFII holders are incentivized to farm YFII and provide liquidity in the YFII pools
  4. This increases the price of the YFII tokens
  5. This increases the yield that YFI community is harvesting

If there is no such feedback loop, the price of YFII will slowly bleed to 0, which will make farming it unprofitable and the liquidity will flow away from the protocol.

14 Likes

I think this makes a lot of sense. This would also encourage them to setup a legit governance.

5 Likes

YuP this makes sense 100% sense. There’s no reason to shun YFII for wanting to be like the OG plus the pros outweigh the cons where if we support them w/ rewards then YFI attracts a broader range of people. Being against it does noting to help YFI in my opinion.

8 Likes

You can say that again! :nerd_face:

2 Likes

look at the price. I think this is a mistake, flirting with forks.

1 Like

Great idea. Let’s expand the YF ecosystem. This is what decentralization is all about. And, if it fails, YFII will just fizzle out.

5 Likes

The idea isn’t good ! More copycats only destroy YFI ecosystems!
Against!

3 Likes

I am all for partnership with the YFII community. This sounds like a multiplicative cooperative union

7 Likes

the YFI price has drop 20% now tell the against.

If we accept yfii, there will be hundreds yfiiiiiiiii, and all to sink。

let each develops its own。

3 Likes

YFII /YFIII/YFIIIIII…
So bad!

3 Likes

Bad idea to flirt with forks. Against!

2 Likes

It’s a smart move to for, otherwise , Yearn pool could be forked, that will reduce AUM ,thus the return .

3 Likes

I believe it’s a win win situation for yfi and yfii having a team is better then having another enemy (:slight_smile:

8 Likes

If the risk is minimized and sufficiently disclosed this might be doable. I’m for inclusivity, but I think we need to be cautious here. Not all “forks” are created equally, and some are outright scammy. It’s clear that some forks are only there to hype/pump up and then dump on people chasing that hype. I know DYOR and everything, but I do think we have some responsibly to minimise the risk for people wanting to yield farm not increase it.

For-ish, if we create some sort of due diligence process for tokens we want to support.

3 Likes

Aren’t people concerned that this will dilute/devalue the YFI “brand”?
Also, by legitimizing YFII, we are indirectly providing some dignity also to all the present and future forks, copy-cats, imitations and scams.
This can engender an enormous confusion, and in the end the YFI reputation will be damaged by some scammy Ponzyfi token that has nothing to do with it except this vague association.

5 Likes