The earlier thread on a YFI inflation schedule ([POLL] $YFI Inflation & Reward Distribution Policy) was continuing to generate new ideas and perspectives (yes, including mine). It is unfortunate that it was closed. I invite those that shared ideas on that threat to contribute here. @n00b, @Joey, @karma9000, @Dark, @hc.link, @ceterisparibus, @iTo, @Manfred
Here is one of the replies I made to that thread.
What about a different way forward that may appeal to a larger group of us? There are clearly disagreements about inflation/distribution and related polices, but I am confident that from the most altruistic of us to the most greedy of us, nearly all of us want to see this project thrive. Here are some thoughts of a different mechanism. I am not committed to this, they are ideas for consideration and discussion.
Mint 12k YFI and put in the hands of the Multisig/DAO.
Sell 2k of that 12k YFI on the market over a set and publicly disclosed period of time (perhaps 250 each month over 8 months). Some of the proceeds could be used for immediate expenses (e.g., audits). Remaining proceeds could be invested in Yearn products to earn yield. This would be like dogfooding and would also show that we believe in the project. This may put downward pressure on the price of YFI for a short time, but would allow those interested in YFI an opportunity to buy in. At today’s prices that would inject approximately $8M for use by the project.
Remaining 10k of that 12k YFI could be staked for rewards (assuming this is where the community is headed). The YFI rewards pool (pool 4) was earning about $60k per week. Multisig/DAO would hold about 24% of all YFI (10k/42k) and could be expected to earn about $750,000 per year at that rate. If the use of Yearn products increases such that fees bring in twice as much, that would be about $1.5M / year for the Multisig/DAO.
In addition to the proceeds remaining from the sale of the initial 2k YFI. That $750,000 or $1.5M or whatever per year could be used for a variety of purposes. Audits? Dev funds? LP rewards could be paid as yCurve or yUSDC (or other y products). If YFI is determined necessary for a particular pool or for a particular time, those funds could be used to purchase YFI on the open market and then distributed.
This gets YFI minted; allows those interested in obtaining YFI to get in; and gives flexibility for paying expenses and also rewarding LPs with different types of incentives.
I am not convinced that we need as much as 50k YFI total, that the newly minted YFI should be dolled out over years, or that we should adopt a schedule to distribute YFI to LPs at all (I will reply to the new thread on YIP 31 for that discussion).
YIP 0 prevailed. Whatever the views before that vote, out of respect for the process we should accept that there will be more than 30k YFI. That does not mean that 50k is the right cap, however. I would suggest that something lower is more appropriate and that all of the newly minted YFI be directed to the Multisig/DAO.
It also does not mean that the additional printed YFI should be distributed according to an 8 years schedule (plus a tail). If the intent is for the Multisig/DAO to hold YFI, and for us to vote on distribution, why not distribute all the YFI now and allow us to vote over time. We are not 10 year olds waiting for an allowance. By distributing it to the Multisig/DAO now, we gain flexibility. In addition, the Multisig/DAO can enjoy a larger percentage of the rewards generated by the project immediately.