Yfi_whale Proposals List

Thanks for doing this!

I’m for this proposal.

Inflation issuance makes sense. I would go for the lower bound though (or maybe some mid-point between 3000 and 12000).

My reasoning is the following:

I think YFI is undervalued based on what other DeFi projects are currently valued at. How undervalued? Let’s do some relative valuation.

In terms of Fully Diluted Market Cap. / TVL:

The cheapest notable DeFi project at the moment is Aave, which stands at 0.7 (383.4 M / 556.1M)

Meanwhile, yEarn has a Fully Diluted MC / TVL = 0.11

Thus, by this metric a fair valuation for YFI would be around 7200

For those wondering, this isn’t a metric I got out of my hat, but rather something used by top investors in the space (who understand it - not the typical VCs): https://twitter.com/SpartanBlack_1/status/1280783859894767616?s=20

In terms of P/E or rather, Price / Fees Generated, we have the following:

The cheapest notable DeFi project is Bancor, with a P/E of 39.

Meanwhile, assuming 50000 in weekly fees, we have the following P/E for yEarn: 37.5M / 2.6M = 14.4

Thus, by this metric YFI would be undervalued by a factor of 2.5x. A fair valuation, then, would be 3150 per YFI


So, we have a fair price between 3150 and 7200. If we take the average we get a fair price of 5175. And this is conservative, as only the cheapest projects were taken into account for the relative valuation exercise.

In this sense, if we take the lower issuance bound of 3000, which implies around 1000 for Marketing, we would be allocating around 5M USD for Marketing expenses within 2-3 years.

If we go for a mid-point (7500 new YFI issued), we would allocate around 5500 YFI for Marketing purposes, which would imply an expense of about 28M within 2-3 years.

I would see something between the lower bound and the mid-point working pretty well.

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