Request for Comment and feedback
Yearn should strive to be the first real use case company that succeeds in an on-chain and decentralized governance. The governance of the Yearn ecosystem is crucial in creating a truly decentralised autonomous organisation. We could be pioneers of a truly decentralised on-chain active governance by integrating specific governance structures and voting systems built specifically for each of the Yearn products and entities. We must be active and self evolving which has already been shown with the current ethos of the team. Well done!
YFI: The YFI token should be used to fund, develop, and deploy system and network upgrades to enhance the performance, functionality and usability of each Yearn product. These incentives are key to rapid development and having an open governance processes will allow the Yearn ecosystem and its networks and communities to prosper. The key is to foster a community of longterm oriented token holders and developers to participate in the network’s governance. On-chain governance processes should allow stakeholders and developers to vote on upgrade proposals actively. Participants can vote, delegate, and fund each other to upgrade Yearn’s products to continually improve the infrastructure. How can we do this?
The core of Yearn’s governance can be implemented in several customisable modules, suggested below:
Council: Yearn allows voters to nominate a set of accounts that hold certain rights over the Yearn ecosystem. This has sort of happened with the keys being distributed amongst a few of the community members. Yearn Council members can potentially bias proposals? Yearn Council should be key people, strategic partnerships and organisations that support the Yearn Ecosystem. These council members will be chosen to govern each unique yearn pool and product. All referendum with Yearn Council could be cast with both coin-weighting and lock-time-weighting. 1 YFI will equal one vote and lock-time-weighting allows the vote to continuously run 24 hours a day. Yearn Council will need to keep their tokens locked for council benefits. The role of council is to ensure that all projects are completed and verified.
Democracy: The YFI voting systems should allow users to choose between many different methods for voting on proposals.YFI functions as the standard for digital democracy within the Yearn ecosystem. These are differentiated by a combination of binding referendums along the voting process depending on which product it is created for. The key is to allow the smart contract language to allow for many democratic models based upon the needs for each of the different Yearn products:
Binary: a traditional yes-or-no vote
Multi-Option: where individuals can select multiple choices
Commit-Reveal: a scheme to commit to a specific vote by posting the hash of the vote.
Coin-Weight: where votes that an individual account casts are weighed on a per coin–one coin is equivalent to one vote
Lock-time weight: where an account votes with a specific lock duration, with longer times corresponding to more voting power. Lock-time-weighting allows individual accounts with a smaller token balance to exercise more power in the governance process.
Treasury: The YFI Treasury allows users to vote on the allocation and usage of newly released YFI.Yearn proposes to use the YFI reward to incentivize all stakeholders. Block inflation will be allocated token towards an on-chain treasury which will be allocated by specific treasury proposals. Initially, the on-chain treasury should be funded by an X amount of the total supply, if the total supply is to be capped.Treasury could be funded by X% of the block reward.
YFI Treasure should allocate funds to:
Core Technology: Implementing of scaling technologies such as runtime improvements, sharding, and off-chain extensions.
Governance: Governance systems, including on-chain identity as well as tools for organizing and coordinating the work of core developers.
Developer experience: A mature toolchain for developing, debugging, and testing smart contracts.
User experience: Wallets and user experience of Yearn Products.
Ecosystem support: Engaging developers, end users, and other stakeholders through actual-person meet ups and public events.
Signaling: Signalling allows users to create and distribute polls for signaling interest in different proposals, strategies, and directions. Individuals can choose between many different methods for voting on a proposal. Once a direction has been chosen, the council or the democracy module can create a binding on-chain referendum. All YFI stakeholders should all be able to collaborate on the roadmap of the Yearn through on-chain signaling. This planning stage is a natural precursor to the on-chain governance process, and formal votes are held to fund and upon which agreed upon features are implemented.
Future: The future and success of Yearn ecosystem will require involving a large global set of committed stakeholders, including validators, voting YFI holders, application developers, and core tech developers. The governance structures needed to coordinate each of these classes of stakeholders will have to evolve organically over time. Establishing robust procedures for conducting on-chain upgrades will be critical step towards ensuring the security of Yearn products. All Yearn upgrades should be audited and tested by multiple independent parties.