Token Allocations at Peer Projects

There’s been a significant debate around the amount of YFI that is reserved for our protocol’s future growth and what that should look like for Yearn to retain and support talent and expand our product offerings. So, over the past few days, I’ve worked to compile data on what token allocations look like for other projects in DeFi (with help from @bigba_daboom, @tracheopteryx, and many others).

Here’s the link to the HackMD, that structures the data and provides some insight:

Furthermore, if anyone is interested in the raw data we gathered, it can be found here, in this spreadsheet:

TL;DR

Team token allocations

Projects such as Uniswap, Aave, Synthetix, Compound, 1inch, Curve, and Balancer hold anywhere from $300 million-$2.13 billion in tokens aside for team members, with the average being between $500-600 million. This is generally 20-30% of the total token allocation. Newer projects such as SushiSwap, Badger, CREAM, Harvest, and Cover vary more between teams, but allocate between 10-25% of token supply to their teams and early contributors.

It’s worth adding here that CREAM just rewarded two Yearn strategists (@macarse and @SamPriestley) 700 CREAM each (~$133,000) for the significant work they’ve done on Iron Bank. This is very similar to the 10,000 BADGER (~$150,000) that was allocated for developer mining during the first month for Badger, most (or all?) of which is going to Yearn strategist @andy8052.

And just in case anyone is unclear about this—I’m not tagging them to say “they’ve already been paid”, I’m doing it to point out that other protocols are very happy to compensate them for their expertise, and as such may endanger our ability to retain such talent.

Treasury/operations token allocations

While the numbers vary here more widely, most of the major projects still have significant token amounts set aside for operations. Uniswap is on the high end with $4 billion, Aave, Synthetix, Balancer, and 1inch all have between $200-$570 million, and likely other projects without any tokens set aside for operations have ample funding from investors (Curve and Compound).

Newer projects set aside around 10% of token allocation to operations and protocol improvements (or more, in the case of Badger). Badger also has specific incentives targeting strategists, which may be problematic to Yearn since (at least to start) they have essentially forked our vaults with an emission token on top.

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Great analysis. I personally totally agree, but think we should do a toke split similar to $dot like 1 YFI = 1,000 new YFI at the same time. A little like AAVE = 100 LEND, and added another 30% coins. I meant we could make new YFI 33,333,333, each old YFI can conver to 1000 new YFI. The new added 3,333,333 is for Yearn development.

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Happy to give more insight into how much core devs at Sushiswap are rewarded.

This is all public and will benefit in how devs and strategists can earn.

Older first dev core contributors were rewarded 100k USDC with 200k Sushi (around 1.25$) so a total of 350k$ this might seems a lot but we were in a bear market with a high chance of the sushi part being worth nothing…

They had enough to pay their living expense and make sure that if hard work was done rewarded aligning incentives … today this is worth 1.5M is this too much? No, they have earned it they are rockstars and created value that equals co-founders of traditional IPO’ed company how much did employee number #5 earned at Google - Facebook? YFI is a billion-dollar protocol and should align incentives for their rockstars devs or they will be poached by others.

YFI scarcity doesn’t matter you can’t have 30k x48, Banteg, Klim, Doggie, Tracheo, Andre, Marco, Sam, dudesahn, and so on.

Core devs salaries at Sushiswap :

100k USDC - 200k SUSHI
60k USDC - 250k SUSHI

New hiring guidelines specify a total compensation package of 300k USD per core dev.

Maximum of 120k USDC with the rest in Sushi at the price (7 days average) of the proposal.
(a person willing to take more risk is welcome to lower his USD compensation etc.)

Yearn should start to align incentives and reward past contributions efforts appropriately IMO

Stronger Together
0xMaki

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Looking at it as purely a % of market cap, most of the protocols (both blue chip and small cap) seem to have treasury allocations in the 10-20% range (e.g. Yam 12%, Aave 18%, SushiSwap 10%). A few are over 20% like Uniswap. I see no reason that a blue chip with an all-star team like Yearn shouldn’t be in the upper teens/lower 20% range for a treasury. That would put it at about $200M based on the current MC.

As a side note, some protocols with very large % in treasury are actually just holding onto future emissions for incentive programs and not necessarily holding all of that for contributor compensation. Not only should the total size of the treasury be considered (e.g. 20%) but also how it should be broken down (e.g. 50% for contributor compensation and 50% for future emissions).

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Yearn is working with Sushi, why it seems that Yearn did not get any benefit from Sushi but just Yearn give benefit to Sushi :smiley_cat::grin: :smiley:

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This is off-topic and will be addressed if there is new YFI minted + in other ways.

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Definitely, I tried to separate this out when possible but I think the ones you’re probably referencing are Aave, Uniswap, and CREAM, correct? Since those are more ambiguous pools that can (and likely will, especially for UNI) be used for emissions in the future.

Please let me know if there’s any others that I missed!

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Through this can we do a split by 10 every time YFI laps BTC in terms of USD price?

Example:
To make it simple math, let’s say 1 YFI and 1BTC = $36,000 (USD)
Multiply the max YFI supply (30,000 in this example) by 10x to become 300,000 max supply.
Each YFI is now worth $3,600 USD…

Each time we make a lap around BTC we do this. The average person gets thrown off by paying $3,600 for .1 YFI I think. Just some thoughts that we could do this as part of whatever is decided here.

Tesla splits all the time. You guys can be the Tesla of Defi.

-CCC

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I can add a bit of color here with regards to Badger. They have been very generous with $BADGER in their strategist rewards. I do not believe I will be getting all of the tokens, I also haven’t actually received any yet as I think they are still ironing out some kinks with how that will all work and I have no clue how many I will receive. As far as token payments go and how it influences my work, I was very clear with Badger from the start that I did not want to just directly port any yearn work that I have done to badger and that was totally cool with them as well. No amount of tokens would change that for me. But fwiw they are very interested in working with yearn collaboratively and not just competing.

My work with strategies has slowed due to the holidays, other work and the waiting time for v2 to launch, but I am definitely not going anywhere. I never expected to be given any YFI for my work on strategies and I am incredibly grateful that this is a conversation people are having. Having more YFI/a developer program would certainly give me a greater reason to focus my dev efforts on Yearn strategies vs my other work such as Badger, ESD and others, but at the same time I love Yearn and don’t plan on ever just fully not being involved. I don’t really have a concrete point or ending here but I hope that this gives a bit of insight into my thoughts being someone who has worked on Yearn strategies for the last few months.

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Community strategists have been on fire.
We hope this is a call for new strategists which may want to benefit from userbase and increase their capital inflows.

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By solving these problems by using existing assets from other protocols as collateral so that:

  1. Assets are optimized and not idle. Users don’t need to decide between protocols.

  2. Double-risk is turned into triple-benefit as users get LP fees, staking fees, and asset exposure.

  3. tokens are backed by a treasury insurance fund that contains >200 assets, minimizing the risk of single asset failure.

The following funds:

  • Fees collected.
  • Dev bounties/Partnership Fund.
  • LP Fund.
  • Community Fund.

The community owns the fund and votes on its allocation using the governance mandates. While each of these funds has a primary purpose, the organization can vote to re-purpose or redirect these funds anytime.

The purposes of the funds are as follows:

Dev Bounties / Partnership Fund: The goal of this fund is to drive partnership integrations and listings with exchanges, as well as to create ecosystem development bounties. This is the largest treasury fund and can be used for things like:

  • Integrations with third-party products.
  • Sponsoring new information websites for the ecosystem.
  • Sponsoring new feature contributions to the code.

LP Fund: The Liquidity Provider Fund is designated to provide token loans to liquidity providers and listing partners so that BAO has a strong liquid market from day one. Community Fund: The community fund’s goal is to be used to sponsor engagement within the community. This can include things like:

  • Rewarding content creators.
  • Rewarding volunteer moderators.
  • Rewarding translators.
  • Providing rewards to the users with the most referral volume.
  • Sponsoring other contests.
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