Bitcoin may be the original cryptocurrency, but that doesn’t mean that leading decentralized finance (DeFi) projects don’t feel self-confident enough to differentiate themselves from Satoshi’s vision.
“Let’s not be Bitcoin. This idea of hard caps for start-ups is very romantic but not necessarily the best course of action for maximum value, ”wrote a participant in the Yearn governance forums, yfi_lit, on January 13.
Yfi_lit wrote this to defend its now modest proposal to bake a brand new store of 1,000 YFI tickets (currently priced at over $ 30,000), the same sign that made the gateway to DeFi, Yearn Finance, famous last summer , when 100% o its supply was given to Ethereum users with assets stacked in key vaults Yearn Finance.
But the newest offering has evolved. Now the Yearn community is gauging sentiment for increasing the supply by 22%, by spending an additional 6,666 YFI (worth something like $ 200 million, at current prices), a third of which would go to core contributors and the rest goes to the treasury.
The proposal, written by 11 different people, considers “a fair launch as a living concept rather than a single event,” they write.
If a sentiment looks good, it will be written as a code and voted on the chain using the governance app, Snapshot.
Not everyone is happy about the new developments, of course. Reminding themes like immobility and a stable monetary policy familiar to many longtime crypto enthusiasts, at least two YFI holders announced on the forum that they could no longer participate in a protocol that did not honor its understandable social contract.
“I have observed the inability of the YFI project to disassociate itself from lord and savior Andre [Cronje] and find his own path, ”wrote a captain under a yfi_lit post, announcing his departure.
When another user signed up to the same decision, yfi_lit replied, “Sorry to leave, but glad that people with that kind of attitude towards our builders have disappeared.”
And it’s not entirely unfair that some would see a kind of contract. Last year, Cronje filed a motion of his own to never bath more YFI and seemed to pass.
Over 90% of poll tickets supported it, but less than 15% of the ticket supply participated.
But the ballot was never acted upon. This is a controversial point in the community, but the current argument is that the only vote was a first step vote or a feeling gathering. Users never voted on an actual code, so it didn’t really count.
“What we found in September was a classic case of misalignment between stakeholders in the YFI community,” Spencer Noon, now of Variant Fund, told CoinDesk. “Burning the keys is likely to cause the YFI price to appreciate in the short term, but possibly at the expense of the long-term sustainability of the project.”
Yearn’s governance processes have become more formal since those early days, but the confusion over this decision remains.
Cronje seems to have had second thoughts.
On Jan. 12, he again wrote on Medium about why construction in DeFi sucked. “Don’t give away your tickets,” Cronje wrote. “I still have all the responsibility and expectation, except I have 0 of the award or upside down. Don’t do this, I was an idiot. ”
It should be noted that Cronje was famous for expressing his frustrations without being fully committed to actions he expressed in a fiery moment. He has always had his eyes on the door, and perhaps eventually sees a compensation plan as something that would tie him down.
That said, Yearje is not just Cronje anymore. As his team and ambitions grow he continues to look more like the protocol that will be all DeFi-oriented.
Its current fan base does not want to risk losing the talent that has hit the platform this far; overall, it looks like the ticket supply will expand fairly soon.
“Bitcoin has the same mindset, and they are blown out of the water by Ethereum because of it,” yfi_lit argued.
DeFi is building its own set of OGs and they seem to be circulating their wagons largely around this movement. Mariano Conti, former head of oracles at MakerDAO and current member of Yearn’s ilk (the protocol’s closest to a board of directors), told CoinDesk over Telegram
“I do much favor. YFI was the first ‘fair launch’ experiment, and my conclusion is that this model did not fit properly with an ecosystem of developers and strategy writers in the end, the lifeblood of a product. Yearn. “
Last September, Joel Monegro of Placeholder wrote a blog post urging communities to consider a “buy back and make” approach to using platform profits, rather than “buy back and burn.”
Taking this to heart, the Yearn community moved forward a Year Offering Offer called Buyback and Build Yearn, or BABY. It passed with 99% support but less than 10% of YFI voting.
BABY would use profits from Yearn to purchase YFI on the open market and use it for other Yearn donor awards and initiatives (see its third quarter 2020 financial report). Previously, most of the revenue was distributed to YFI holders who stood for governance, but the returns for doing so were relatively low.
Yearn currently earns about $ 100,000 a week in fees, and community member Ryan Watkins argued that this could be better reinvested in Yearn himself.
“Yearn has proven its ability to provide real value to YFI holders, distributing protocol revenues as dividends is a sub-optimal capital allocation strategy given Yearn’s maturity stage,” Watkins wrote in October.
However, the community sense seems to be that BABAN itself is not sufficient to retain the core team.
The new proposal suggests that BABY will only be able to purchase 100-300 YFI per year. Despite the fact that Yearn is expanding rapidly and launching a new version soon, “earnings will probably not be enough to build up an adequate amount of YFI for the Treasury,” the proposal’s authors argue.
If the 6,666 tickets are mined, a compensation committee will be responsible for negotiating deals with specific contributors regarding their “retention package.”
“In my opinion, this is yet another example of YFI having one of the most robust and economical communities in all of DeFi,” Noon wrote.
Before a proposal can go to a vote on the chain using Snapshot, it must run for three days in a chat on the forums. It currently has 133 votes, about 75% in favor of bathing more YFI.
Although some have already begun to doubt the process. “At the end of the day, the devs are going to do what they think is best regardless of community opinion,” Dankmonty wrote as the conversation began. “So just let us know. Not all this drama is needed. ”