Proposal 8: Halving YFI weekly supply the same as bitcoin

Vote live on https://ygov.finance/vote under “8”

Context:

Currently the weekly supply increase of YFI is 30,000 per week. Vote under proposal #0 is if more YFI tokens should be minted.

I’m voting “FOR” on proposal #0 as continuous incentivization of LPs is important for growth of the platform. Most of reasons are the same with proposal 5.

More Reasons:

  1. The YFI mining will be end in 3 days, while the whole crypto community needs more time to understand this complex mechanism. In such a short period of time, YFI cannot generate an effective market pricing.
  2. To stop the YFI mining will instantly result to a huge amount remove of the liquidity, this will be a huge negative to the YFI price because of the decreasing of fee rewards.

This is a proposal for reducing the weekly issuance rate with a model the same as BTC. Two months is enough to educate the crypto community while finishing the YFI generate event.

The pros of the bitcoin halving model:

  1. Halving every week is quite easy to be understood in the crypto community, and effective.
  2. Easy to make memes of YFI - “ YFI is the Bitcoin in Defi ” for virus spreading.
  3. Enough time for the markets to reach the equilibrium. (liquidity provider’s YFI revenue is halved every week while taking the same risks, will result in a steady change in liquidity)

Modeling of 3 Pools

In summary. If proposal #0 passes the issuance model should be altered as described above.

Vote live on https://ygov.finance/vote under “8”

FOR - Support the new issuance model
AGAINST - Do not support the new issuance model

3 Likes

YFI tokens should NOT be distributed equally among those 3 pools. Pool 3 should be awarded the most as LPs from pool 3 are those who participate in governance. I’m okay with <=60k overall supply.

5 Likes

30k shouldn’t be starting point of the supply (besides this week) it is too much. It should drastically drop.

4 Likes

I agree.

From a risk perspective, Pool’s 1 & 2 are fewer transactions to unwind positions into principle assets.
Pool 3, requires further transactions which in sudden shocks to markets volatility increases risk dramatically imo. Pool 3 should be rewarded accordingly.

I am ok with raising YFI limit to 60k* but I would add; irrespective of minting schedule, minting keys should be burned at the end of the proposed schedule.

*Double the YFI supply halves all possible future revenue through rewards.
At the end of the day, incentive or not, future individuals seeking yield will consider the protocol with or without YFI being made available to seed capital. Keeping a view on the horizon is key. Thus, the other side of this experiment is the ability to simplify the way we explain it to the world.

The reason pool#3 is the only one which participates in governance is because of a technical issue. the governance contract is the same as the staking contract for that pool. If the other pools could participate in governance I’m sure they would as well.

2 Likes

I hear you and I can’t and won’t comment on technical challenges and please correct me if I’m wrong, but I’m very much aware of the fact, in order to participate in pool 3, I must engage with Curve, then engage with Balancer, then engage with yEarn. The biggest risk in DeFi is still imo the unexpected flash crash that does all sorts of wonderful things to the human mind.

From a protocol perspective, those funds therefore that are ‘most locked in’ as is Pool 3, are those that aught to gain highest reward. Is this not a reasonable expectation?

I might go one step further and say that again, imo, I don’t find it unjust that only pool 3 contributes to governance voting for the same reason above. Pool 3 is the most ‘vested’ pool, carrying the highest risk.

If I did find the above unjust, I’d say it’s far less so than allowing anyone with YFI to stake and earn rewards without contributing. Which I know is not actually the case but then I’ve not toyed with the system enough to work out if one can vote once, stake and earn continuously and provide no further contribution. More so… can someone reach the point of staking and earning rewards AND then un-stake all their BPT from the governance pool? This scenario would allow individuals to acquire staking rights, then leach rewards without further participation or value added contributions. Is this not the bigger injustice?

I would be voting Against for this proposal.

For one, I believe the supply should not be capped. Continual distribution of YFI helps decentralising the governance with, not only later YFI buyers, but also later protocol participants.

Secondly, YFI should not be distributed to LP of YFI trading pools, but only to voters and first level LPs (e.g. LPs of yearn, yswap, ytrade, etc.). The reasoning is stated in my reply to @Daryllautk’s Request of Comment here.

(I do, however, acknowledge that ideally one proposal shall be made to propose one change only, and that the focus should be more on the distribution model itself, instead of the receiving pool of the distributions.)

2 Likes

Imo mining gov pool is a kind of luxury, although it generates best yield (CRV + BAL + YFI + fee rewards). I do not encourage miners all in this pool because it takes the greatest risk.

Mining pool1 takes the least risk because it’s simple and only take the risk of Curve and Pool1 the two contracts. So pool1 can just generate the least yield among three pools

Imo it’s fair for different miners to take their own risks and get corresponding rewards. Solve this problem through the market mechanisms will be better

2 Likes

I would appreciate people give us a bit of time to setup smooth decision making process instead of directly jumping on-chain, e.g. propose > discuss > vote > conclude > execute.

And it would be nice to give other members some time to think – number 6 in the list: Proposal How-To.

10 Likes

@milkyklim
s/conclude/execute/

1 Like

Totally agree with this. We need to at least reach consensus on the proposal before it even becomes a ballot. I love the propose > discuss > codefi > vote > conclude > execute process.

5 Likes

Thanks, updated the steps.

  1. If yield mining stops, liquidity will instantly be drained, and prices will dump when this happens. The two BPT pools have a total liquidity of 250 million dollars, 2% of which is yfi, worth 5 million USD, which is equivalent to an average depreciation of 200 US dollars per YFI (The spot price drop will be more sharply)

  2. With the withdrawal of liquidity, the slippage of yswap will be increased, and it is impossible to carry out higher leverage stable currency swap transactions, which will affect YFI’s revenue

  3. With the withdrawal of liquidity, the yCRV fee rewards decreased result in the APR decreased, and the motivation to hold YFI decreased

  4. With the withdrawal of liquidity, the slippage when trading yfi/dai and yfi/ycrv increases, liquidity deteriorates, and the willingness to list coins on big exchanges decreases. This will bring less token holders, resulting in price dump

  5. The halving of mining will not affect the miners’ share, but will only allow everyone to lock up their positions for longer, giving the team more time to develop high-yield products to support the token price.

  6. The liquidity must be stabilized before a new proposal is produced, otherwise the future plans will not work

  7. The annualized return rate of BAL is about 40%. According to YFI’s current 576% APR, the mining income within four weeks will be higher than BAL, and the liquidity will not decrease significantly. It will be enough time for community education, marketing and major exchanges listings.

  8. Personally, I started mining from the second day, and I am a YFI holder. Imo that the additional issuance will encourage community development worth more than double of the current price

We can do better than this, fellow gigabrains.

Copying Bitcoin’s emission with a faster rate is very Charlie Lee circa 2011 copy-pasing litecoin in his bedroom.

Let’s be creative and embrace the full world of possibilities.

6 Likes

Ya…lets come up with something more sexy :wink:

I am AGAINST this proposal: This is an arbitrary replication of a non relevant inflation model.

Also, the current split of pools is suboptimal and can be condensed to accomplish the same purpose with more efficiency in emissions deployed to rewards:

7 Likes

I do not agree with this proposal, and I hope it does not pass quorum. In the future, please please allow for more discussion before putting your proposal up on the blockchain. It makes it more likely that very bad proposals like prop 8 might be passed if you don’t allow for community discussion.

1 Like

You can vote against if don’t like it. More than 3M votes now, so you say there is no discussion?

It looks as though you immediately put it up for a vote when you posted the thread, so there was not sufficient discussion, no.
I will not vote against, just as I am sure many are holding their votes, because we would like it to not reach quorum. This is the issue; it’s possible that it could be edged over 33%, with no one voting except the for people because the against people would like to let it die.

What do you propose happens when we reach the 60k in two months? Do we just start another proposal to print more? Why do we need to dilute our supply by 50% in the first place? Why not 10% or 20% or 30%? This is why we needed discussion before the vote was proposed.

1 Like

Why do you think 50% will let it die? Aren’t you a miner? If you continue to mine YFI, your YFI’s share will not be diluted. What i want to do is to let the liquidity stay in the pools. imo liquidity is the most important factor to the success of YFI project. When they are gone, we will be back form the start.

There is no difference between 10%, 20%, 30% if you continue to mine YFI.