There is currently a .5% (default) exit fee on the YFI vault. I propose that we reduce the default exit fee for the current and any further YFI-based automated vault. This will also allow YFI holders to move their holding without penalty in order to vote.
Motivation:
Minimize friction and maximize yield for YFI holders who participate in YFI based vaults.
Specification:
Reduce the default exit fee on the current YFI vault to 0%.
For: Reduce YFI vault exit fees to 0%
Against: Keep YFI vault exit fee at .5%
Reduce to 0%
Keep at .5%
0voters
Note: I propose this as I’ve seen it discussed in several places. This is more a temperature test. At current YFI vault // Cream Strategy APY, it will take over a month to recoup exit fees.
If you use the service I think you should pay the fees. If this passes. It sets precedent for future YFI holders wanting no fees if they hold YFI.
And not paying fees means less rewards to those holding FYI AS a governance token and whom, like myself, hope the rewards will one day allow us to go full time YFI.
Yesterday I saw a whale getting burned with 1.5 YFI that went to the treasury after the fee hit him/her. I don’t have clear how will this interact with the new gYFI proposal by Andre, but if it’s good enough the yfi vault is going to die right?
I’m against this proposal. There shouldn’t be special considerations for YFI holders that want to speculate with their funds. Anyone that entered the yVaults knew those costs upfront (it’s displayed on the website).
I’m for reducing the exit fee. As mentioned in the OP it will take a month for people in the YFI vault to break even so they will be penalized if they want to vote on any future proposals during that time. Having a portion of YFI holders discouraged from voting seems like a bad idea to me.
If the gYFI time weighted voting power distribution proposal passes, then I think it makes sense to have a one time rebate on the exit fee with a specified time window, since this is new information that changes the mechanics of governance. Otherwise, those that used the vaults should live with the opportunity costs of the decisions they’ve made.
Yeah, that’s why I don’t like the yvault for YFI at all. YFI belongs only to the governance contract, that’s why it was created for. If you are chasing yield with the token outside the governance contract you deserve to be burned (economically speaking)
I don’t think there should be a special case for YFI fees in the long term, and there’s even an argument for having these fees there as a positive for security. But a grace period when/if the newfangled time-weighted voting is implemented would be fair to those of us who deposited with no intention of withdrawing soon but would get bogged by a governance change we had no way to know would happen.
All the people who would vote in favor of this are in the YFI vault, not staking to vote. If they were to leave the vault to vote, then their incentive switches to voting no.
Here we have a proposal to “minimize friction” in combination with another trying to achieve the opposite: time weighted voting power will discourage moving tokens, effectively increasing friction on purpose.
In YIP-36 YIP 37, governance voted to keep investors’ tokens for the benefit of the ecosystem. Following the same logic, there’s about 20 YFI in eventual exit fees embedded in the vault that belong to yearn governance, which the vault investors have known in advance they would need to pay. Donating them back would not benefit the yearn ecosystem in any way.
But by depositing in the YFI vault you gave up your right to vote in governance AND receive rewards. The gYFI proposal therefore does not effect your position in the slightest.
Those YFI tokens would effectively be burned to my knowledge or contributed to Andre so that he gets a vote. So imo they would benefit us all greatly in either instances.
Further. Would those of us that contested and did not move our YFI from governance to vault be compensated in the YFI earned? I doubt that very much.
It’s a choice, we each freely made with no foresight to how the future would unfold.
Lastly. There’s no down side to owning ones own decisions AND changing ones mind. Wait it out. Earn enough in the vault to exit break even or in profit and then come back to governance. I would only ever consider this an education.
yeah i agree, i just lost some precious yfi moving out of vault. i mean my own fault for going in i knew the risks, and the fee, but meh. would be nice to have 0 percent fee for yfi holders.
Everyone wants to have their cake and eat it too. We are in favor for keeping the fees, there needs to be an opportunity cost for not staking. Lets face it, other opportunities to lend your YFI in the future to other protocols will emerge. If these people don’t want to vote and chase higher yield that’s on them.
I am undecided on this. I like the fee, however I do agree we should not disincentivize voting with the vault.
We also want to incentivize YFI holders to keep their YFI in the Yearn ecosystem, or at least away from some of these food farms. Some of them do pose a serious threat to us-- if a large amount of YFI was compromised governance could be hijacked or manipulated.
I would rather have people locked in the vault earning off of fees on Yearn than farming a random fruit coin. The fees increase the incentive to keep your YFI on Yearn, which is good
Andre apparently clarified the intended system is to use preset lock times, so it really does make no difference. When I made that post I was under impression the vote weights would be gradually incrementing, meaning you’d be at a long-term or permanent disadvantage when you did decide to come out to vote vs someone who was there from when the weights were implemented, where that was not previously the case. If some version of this ends up being what is settled upon I stand by my opinion.
I think YFI Vault usage should be discouraged because it gathers YFI in a place that’s not governance, and thus is a possible risk (e.g. if someone creates a malicious farming contract that allows for YFI staking).
I would like it if more people were incentivized to stake their YFI in governance rather than chasing higher gains. Agree with @Juanma that YFI should be used for governance, and a fee seems more than fair if you’re risking it for higher gains.
I think of the vault as an immune system for YFi that will kick into overdrive if the price ever drops super low. That’s its prime directive, rather than a vehicle for short-term speculation. Exiting with more YFi than you started with at low penalty just incentivizes further price volatility. Rather, we should be incentivizing long-term participation.