Ignoring past contributions for a second and thinking about future ones - have any other protocols used options (with material strike prices) yet to compensate contributors?
I’m kinda semi-convinced that newly minted YFI would be classified as a security. Or am I missing something?
It’s not being sold for anything. Don’t see why it’d be viewed differently than the initial launch.
Because each token entitles you now to receiving part of the “revenue” and it will be sold by the multisig to somebody eventually -> minted to be bought by investors - 1 to 1 like a stock share
Yep, a lot of protocols use token warrants to motivate employees/developers, similar to stock options employees at startups get.
That’s a good point, and a securities lawyer should review this. Even if the SEC was persuaded by Andre’s meme that YFI “has no value”, what is the SEC going to think when Andre and the other devs are insisting that we mint more to compensate them better? And mind you, it won’t be only the “newly minted” YFI that comes under scrutiny.
So that’s the topic that brings so much philosophical speeches on Tweeter.
I personally don’t mind a 3% inflation on my holdings as I haven’t bought my YFI.
However I understand people who spent money on a narrative, although practically speaking their YFI will be their voice when/if there is a on-chain vote.
But to me the biggest question is how such a highly capitalized project is unable to redirect a portion of the created value to the developer, and is there any sustainable way to do so ?
I thought vaults fees were redesigned so there would be a common bucket filled with funds available to pay dev or grow the ecosystem (or even sponsor stuff of Gitcoin) ? Can we elaborate on this ? What didn’t work out ? What has been tried so far.
I don’t mind an inflation if there is a strong reasoning behind it, or a plan. Crypto unlocks so many new ways to redistribute value, and inflation is only one of them.
I think one big question is : Would this inflation be a temporary fix to compensate a bad or unsustainable design of the YFI ecosystem, or part of a well thought plan ?
There needs to be less of an emphasis on the short term concern over pressuring Yearn’s price and more of a scramble to recruit and retain talent. You can never completely control a market as it is the embodiment of millions of decisions by individual actors, but you can be 100% sure that DeFi is an extremely competitive space with other projects throwing capital at devs, 1000% sure that Yearn needs to recruit talent in order to stay competitive, and 10000% that talented devs are always going to prefer working on something that makes more money vs less money. In the stock market, companies frequently have secondary offerings as well as buyback and despite secondary offerings being dilutive, we see many stocks soar after these offerings. The key is that these companies are effective at marketing clear plans of what the capital will be used for and illustrate convincingly how this spending ultimately results in value creation for investors in the long run. Furthermore, the board, made of the largest investors can hold the companies officers’ to their promises with votes on corporate actions. As long as yearn can maintain accountability for devs through the governance system, I think it is clear that we need to rethink the incentives that we give to devs and make them more attractive.
For Yearn, as long as it is effectively marketed how Yearn will be better positioned amongst DeFi competitors after issuing more, new mint should give new life to the token and the fundamentally optimistic holders will hold for longer. The short term price action may be negative but means little unless it is on big volume and this coin definitely needs more volume/attention in general. Loyalty of the remaining investors will be higher and so will the loyalty of developers. Look at many of the companies on the stock market recently, they keep on popping out secondary offerings, and because they market and time them so effectively, we see these secondaries have very high demand and actually be turn out to be very successful for everyone - the company and investors included. At a point the marketing alone was so successful that early round investors, employees, and officers could all dump their shares on the market and influence the overall price very little.
Yearn needs to mint more for devs, and broadcast to the world, when famous talent joins. This is still a tech battle - the model for winning is not rocket science - look at how Google, Facebook, Apple, Amazon pay kids out of college. Mint appropiately to hoard human capital, and refine the governance system in terms of accountability. Then, give these devs grubhub premium too and a fancy gym membership!
The world of investors need to know constantly that the best devs work here and the world of devs need to know constantly that yearn rewards the most. It’s pointless to argue whether the chicken hatched before the egg, let just get our hands on either one first and we will eventually have both!
We must find a sustainable & scalable solution to become a globally successful protocol.
My proposed solution
a) Let’s crowdsource a great HR/Compensation team (just how we got devs)
b) Incentivize them to come up with an attractive compensation structure that is scalable across time and size of Yearn ecosystem (100,000+ contributors in the future)
c) Let YFI establish a golden standard for DeFi compensation
Do not just mint and kick the can down the road.
What is not scalable?
a) Ad-hoc minting - mostly swayed by $YFI influencers || It will lead to huge conflicts of interest down the line – let the compensation experts show the way
b) Buybacks are unsustainable as well
Short term fix
a) Very controversial but direct the treasury funds to a multisig for “x” number of weeks and let that group decide how to distribute money to devs (kind of emergency powers?) – I am not totally sure, but open to discussion.
Let us come together and turn this tough situation into an opportunity.
Then pressure the VCs who have bragged about profiting massively from YFI to give back to the community which built the project. They had no qualms using their investors’ funds for speculation but now they cannot return a small favor(what is 3-10% when you make 300% or more?) to the contributors who made them their riches? Had they not bought as much as they did there would have likely been more float for the community to buy in cheaper.
Others read more here: Keeping Yearn Great - Funds, Incentives & Rewards
Hey which proposal are you referring to? The one that turns a larger portion of future yield over to developers?
Do you mean the one where, in v2, the fee structure is the 2x20 model for developers of strategies? Is that what you are referring to or something else?
FYI, just posted some data I’ve worked to help gather/synthesize as its own post here:
A large numbers of high-quality assets suitable for opening to more users.
Agree with incentives but not this one. Sir, your proposal should be carefully think, like including others’ opinions. Seems your this proposal let YFI down. Voted Against.
I think this is going to decide either yearn is a community or corporate.
Community isn’t paid but corporate is paid so security argument will come.
Bitcoin is a community, people are enjoying contributing voluntary with working with legends.
I think yearn succeeded because it was voluntary started and super useful.
Leave and get a job if you want to get paid. I’m sure people will still join yearn and enjoying building.
I totally agree devs should be rewarded. And they are already rewarded with the yearn career. I’m sure they can easily find a DeFi job with big salary.
Decisions were made. The decision in question was made to be permanent. This was not a “we will see after 2 years” decision. Try respecting decisions.
Whether the coins actually have value is not dispositive on the securities issue. It’s more of a red herring really.
Rising ecosystems are hiring full-time solidity devs and FE devs.
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