Yearn Governance Roundup #1

Week of September 21, 2020

Welcome to the Yearn Governance Roundup — a weekly newsletter covering everything in the Yearn Governance pipeline.

📋 Quick Hits

⚖️ Proposals and Discussions

Make sure you join the governance forum if you want to get involved with these discussions! Table of contents:

YIP: Release fee rewards

CEO milkyklim shared this proposal on Sept. 21. Here’s the summary:

Allow people to claim their rewards right now without any on-going voting.

The previous mechanism to claim YFI governance rewards required users to vote on a proposal before they could claim. The crazy high gas fees on Ethereum have forced us to migrate governance voting off-chain through Snapshot (discussed last week). As a result, users could no longer vote on YIPs in order to claim their rewards. EDIT: The UI to claim rewards is still being worked on. You can claim by interacting with the contract directly from Etherscan.

Voting for this YIP ended on Sept. 23 with >94% in favor of releasing the fee rewards. No new code had to be deployed. Once the proposal passed the multisig simply set the breaker to true in the governance contract.

Bridging Governance & Strategy

iTo shared this proposal on Sept. 22. Here’s the summary:

An off-chain governance model that allows participants to: Engage in ‘yield producing’ style activities, engage in ‘governance’ voting, receive rewards for their continued participation, and maintain access to rewards between YIPs.

There’s too much going on with this proposal to explain the whole thing in detail, but I’ll provide the basic idea. Important assumption for this strategy: YFI gets accepted as a collateral type on Maker. This strategy will allow YFI holders to deposit YFI into a “governance vault” and receive gYFI that is then deposited into the governance contract. The original YFI will be deposited into a Maker vault to generate DAI which is then added to a DAI strategy—exactly like the yETH vault.

When a YIP is proposed, holders of gYFI can vote on a proposal where afterwards they will be able to redeem their rewards. The big question brought up in the proposal and comments is: Should governance staking be allowed as a separate option, and if so, should governance rewards continue to only flow to those stakers? I believe this is a worthwhile conversation to have, so make sure to share your thoughts!

yETH-YFI-BULL strategy

aliatiia originally shared this proposal on Sept. 4, but it has since garnered quite a bit of conversation and a new poll has been opened. Here’s the summary:

The yETH-YFI-BULL strategy is a vault that accepts YFI and ETH deposits, 50% of funds are in the YFIETH Uniswap pool to collect fees and farm UNI. The other 50% is in Aave and yETH. YFI in Aave is leveraged the same way yETH leverages the ETH in MakerDao. The USD value of ETHs and YFIs are kept at 50:50% through incremental rebalancing: buying YFI with ETH when USD value of YFI AUM goes down and vice versa. In black swan event (DAI liquidity crunch) this vault moves collateral to yETH vault to avoid liquidation.

The obvious downside to such a strategy is that it exposes 50% of the portfolio to impermanent loss—a recurring concern in the comments. The obvious upside is that this particular strategy will find some appeal among hardcore bulls in the ecosystem.

As a result of these mixed concerns: It’s also been proposed that if strategies like this are to be implemented, they should exist under a different name (e.g. yPools), with distinct branding, educational material, and clear disclaimers. Making it so they only attract power users. You can signal your vote here.

Add Insurance cover to YFI that is staked

Consultant shared this proposal on Sept. 22. Here’s the summary:

Maybe the YFI deposited into the YFI governance vault should be ‘insured’ for the duration of governance staking with the cost of the insurance coming out of the governance rewards.The idea that the YFI sitting in governance vaults is ‘insured’ will be an additional attraction and will incentivize many people.

While this proposal isn’t completely fleshed out and hasn’t garnered any support, I do think it’s interesting to observe the community’s opinion on collective vs individual responsibility in the yearn ecosystem. The most popular response is that if people want insurance, they should get it themselves. If you’re writing a proposal in the future, keep in mind that many have no interest in paying for other people’s risk — especially with no reward.

Bonus: MIP10c9-SP10: Subproposal to Whitelist Yearn Finance on BTCUSD Oracle

Great news, MIP10c9-SP10: Subproposal to Whitelist Yearn Finance on BTCUSD Oracle was approved with 100% of participants voting yes (>23,000 MKR). This means that a future yWBTC vault — like the yETH vault — can use Maker’s BTCUSD OSM Oracle.

Remember: The OSM ensures that new price values propagated from Maker’s oracles are not taken up by the system until a 1 hour delay has passed. This means that in the event of a rapid collateral price cash, the yVaults will have an hour to fix their collateralization ratio to avoid liquidation.

Poll: Community Greenlight Poll — YFI (

The Maker Governance Facilitators have placed a governance poll into the voting system which asks whether the asset YFI ( should be prioritized for inclusion in the Maker Protocol by the domain teams.

If green light votes exceed defer votes, this poll is to be taken as a signal to domain teams that MKR Token Holders have approved further domain work with the aim of adding YFI ( as a collateral asset to the Maker Protocol. Maker holders, go vote! The poll will be active for ~9 more days. Here’s the current state of the poll as of Sept. 24:

Bonus: Uniswap / Add YFI/ETH pool to list of pools eligible for rewards?

Our own devops199fan shared this Uniswap governance proposal on Sept. 18. Here’s the summary:

The top 5 tokens on Uniswap are already incentivized via liquidity mining, and there is already an existing proposal for $UNI (Add $UNI/$ETH pool to list of pools eligible for rewards 155). The next clear candidate for $UNI rewards is YFI:

While the Uniswap governance process is still in flux and delegates are still being… delegated(?)—it seems like this proposal is still garnering support! Voting ended right before this post was released with a majority voting Yes. Hopefully we can see this implemented in the near future.

💵 Treasury Update

Treasury (Executive) — Sept. 24 2020

Treasury (Vault) — Sept. 24, 2020

Treasury (Governance) — Sept. 24, 2020

🗺️ Ecosystem Links



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