Yearn Finance yNewsletter #67
Welcome to the 67th edition of the Yearn Newsletter. Our aim with this newsletter is to keep the Yearn and the wider crypto community informed of the latest news, including product launches, governance changes, and ecosystem updates. If you’re interested in learning more about Yearn, follow our official Twitter and Medium accounts.
Summary
- yETH: Bootstrapping — Whitelisting Now!
- Yearn’s V3 & Uniswap’s V4: Parallels amongst (R)evolutionary Protocols
- Yearn Gov [Proposal] Activate veYFI rewards with oYFI Gauges
- New Velodrome OP Vaults
- War Room Games with yAuditDAO and yAcademy at EthCC 2023
- Yearn and other guest protocols discuss LSDs, hosted by RedStone
- Community and Ecosystem News Feat. Ramses Exchange, Perpetual Protocol, Reserve Protocol, and AI
yETH: Bootstrapping — Whitelisting Now!
Whitelisting for yETH has begun!
With the Bootstrapping phase now underway, let’s revisit yETH and how you can participate.
yETH is a single LSD token whose composition is made up of 5 other LSTs. By creating a yETH as a “basket of LSTs”, yETH is able to provide:
🔹 Liquidity & Depeg Resilience.
🔹 Risk Hedging by creating uniformity among varying decentralization profiles.
🔹 Yield Aggregation.
🔹 A scalable growth platform with utility for adding additional LSTs (st-yETH voters may vote to add 1 additional LST to the initial 5, per Epoch).
st-yETH voters will decide which 5 LSTs yETH will initially be comprised of. st-yETH voters will also determine the direction of yETH going forward. As such, Yearn integrated a number of incentive mechanisms to empower st-yETH voters and to foster the growth and longevity of yETH.
🔹 Protocols applying to be 1 of the 5 LSTs will submit a 1 ETH Whitelisting Application Fee, which will be applied to yield for st-yETH users.
🔹 LSD Protocols (and ALL st-yETH holders) may deposit incentives for other st-yETH holders to encourage positive or negative voting outcomes.
🔹 If you provide incentives, and your incentivized Protocol is not successful in being selected, those incentives may be reclaimed.
🔹 The Top 5 LST Protocols that are selected will have their incentives disbursed to ALL participating st-yETH holders, regardless of their voting composition.
🔹 Incentives can be used to affect outcomes of yETH Governance proposals so that yETH’s future may be directed by st-yETH voters to their benefit.
Protocols are encouraged to incentivize the st-yETH holders to vote in their favor. There is power in being 1 of the first 5 LSTs:
🔹 Initially selected LSTs will have a unique opportunity for their own protocol’s LST to comprise up to 45% of yETH’s total composition. Significant voting weight = significant demand for your own protocol’s LST. All you have to do is convince the st-yETH voters.
Reminder: The Whitelisting Phase has begun and is only open for 16 more days*
Protocols: Submit your application now, and prepare your incentivization strategies.
Users: In 9 days, Deposits will open for you to deposit your ETH to become an st-yETH holder. May your diligence bring you rewards with bountiful incentives:
*Days referenced are at the time of writing. Please use the link above to see the countdowns and to check on the status of current timelines.
For a more detailed look into yETH and Bootstrapping Phases:
🔹 YIP-72: Launch yETH
🔹 yETH: LSD Lobbying season is now open
Yearn’s V3 & Uniswap’s V4: Parallels amongst (R)evolutionary Protocols
Exploring the similarities and differences between Yearn’s V3 and Uniswap’s V4:
- Examples include variations in Protocol fees and how to approach maintaining the longevity of the base protocol, funding new (future) development, testing, auditing, and encouraging ingenuity, etc.
- Approaches in gas savings methodology, single or multi-chain compatibility, and other differences will begin to be defined as the key differentiators as the space grows and new niches are explored.
As protocols continue to evolve, so will naturally occurring similarities. Optimization means embracing transparency, building together, and realizing that no one has a monopoly on good ideas.
You may have seen similarities in expressed goals across many protocols in DeFi. We see shared principles, a desire for optimization of cross-protocol interoperability and unforeseeable vertical integrations, long-term visions of immutability, and dreams of reducing barriers of entry to help foster creativity so that all may participate. V3 is built with all of these concepts and goals in mind.
“Providing a secure and efficient base infrastructure that anyone can build on should allow the best ideas to flourish no matter where they come from.” — Schlag
- Wen V3? Ready for Prod deployment target is by the end of Q2. Behind the scenes, it seems deployment is getting closer, with Audits expected to be completed as early as this week.
- V3 has a lot to look forward to, and the ease of protocol composability also introduces potential applications for the utilization of tranches. Dudesahn, a long-time Yearn Contributor and builder, is bullish for yJuniorTranches that will come from V3. Expanding on that thread, there are some great points made by others on the underutilization of yield tranches with various risk/reward models.
Yearn Gov [Proposal] Activate veYFI rewards with oYFI Gauges
The implementation of oYFI addresses Section 2.3 of the YIP-65 spec, “Vault gauges + Voting” by integrating oYFI tokenomics for emissions, gauges, and rewards for active veYFI participants. The proposal received nearly unilateral support for YIP implementation.
The Proposal is comprehensive and thorough, with a design and implementation model focused on risk-averse adaptability to meet evolving needs. Potential risks are discussed, along with considerations that led to some additional features, such as epoch-based voting and linear decay voting weight mechanisms. The community is also excited about the potential “flywheel” utility and “controller/feedback mechanisms”.
New Velodrome OP Vaults!
Set a steady pace to explore the ~50 new VelodromeFi v2 pool vaults that were recently deployed on Optimism!
Now, how about some stablecoin yields that are gold medal-worthy? At the time of writing this, the DAI Vault was at 10.20%
War Room Games with yAuditDAO and yAcademy at EthCC 2023!
In town for @EthCC 2023 and itching to flex your hacking skills with some smart contract war room action? Sign up now to take your shot alongside some of the best in the business!
- Need a best-in-class Security Audit for your protocol? Submit an inquiry to yAuditDao here!
Yearn and other guest protocols discuss LSDs, hosted by RedStone
Guest speakers included Corn with Yearn, Lybra Finance, Swell, unshETH, and Cian protocol. The discussion met with a uniform consensus on the positive impacts of LSDs in our space. Here are some takeaways:
- ETH has unique, native yield-bearing characteristics, and the integration of liquid staking tokens will contribute to a more captive ecosystem. Without the utility of staked ETH, it would be relatively dormant. The reintroduction of ETH as a liquid utility is helpful to the longevity of the asset.
- Bullish commentary was made on LSD-backed stablecoins.
- Wider scale adoption will ultimately assist in evaluations of new LSD platform risks.
- Regulatory clarification will lead to institutional investment and, ideally, even greater adoption.
Community and Ecosystem News Feat. Ramses Exchange, Perpetual Protocol, Reserve Protocol, and AI
Love for Yearn goes beyond being the most callipygian protocol!
@RamsesExchange has engaged @yAuditDAO for an additional audit for their recent Ramses CL implementation, reaffirming their dedication to security, scalability, and user trust. Ramses Exchange is a Native Liquidity Layer on Arbitrum, and you can find their website here: https://www.ramses.exchange/
What if you could use Yearn’s yield-bearing tokens on Optimism to trade Perps? Soon you’ll be able to with Perpetual Protocol’s Yield+ project. Keep earning your yield from Yearn while using that same asset as margin to trade perpetual futures. Cool concept, and yes, I have waitlisted to request early access. This article sums it up well.
Reserve Protocol declares its additional $20M investment into the Curve governance ecosystem to boost their RToken (community-created stablecoins) ecosystem. We love to see protocols utilizing Yearn’s permissionless factory vaults to automate their own strategies for their betterment! All for DeFi, DeFi for ALL!
The AI narrative isn’t over until Sarah Connor says it’s over. Big Brains at Yearn have been testing some fun AI GPT functionality with yGenius and yDeamon to power Yo — an ai powered chatbot via GPT! Check it out, and contribute to the discussion.
We hope you’ve enjoyed reading this month's yNewsletter. Remember, you are Yearn, and all of us can contribute to help create the changes we want to see. If you want more information (or just want to say, Hi!), we hope you’ll visit us in our Yearn community Discord and Telegram channels!
