Yearn Governance Roundup #10

Week Ending November 29, 2020

Nomad

Published in

Yearn Governance Roundup

6 min readNov 27, 2020

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

Quick Hits

⚖️ Governance Summary

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

🗳️ Active Votes

None this week.

Proposal: YFI Governance Vault + yAcademy

dudesahn shared this proposal on Nov. 26. Here’s the summary:

Create a new YFI Governance Vault that deposits YFI into MakerDAO to mint DAI, and this DAI is used to yield farm. Depositors in this Vault receive governance fees and a portion of the yield-farming profits, with the other portion going to support protocol initiatives such as yAcademy and bug bounties. This Governance Vault replaces current governance staking.

The goal of this proposal is to merge the YFI yVault with Yearn governance. In other words: The new YFI yVault would receive governance rewards / allow the deposited YFI to vote and deposit that YFI into a Maker vault to farm with the DAI.

dudesahn then takes the idea a bit further and proposes that 25% of the profits from this new YFI yVault should go towards a protocol improvement reserve — for bug bounties and yAcademy — and the other 75% would go to depositors. The protocol improvement reserves would maintain a target of 200k yUSD. Should reserves fall below 100k, profit percentages would invert. 75% of profits would flow to protocol improvement reserves, and 25% to depositors until the reserves are back above 200k yUSD.

The main idea here is that we should better align governance stakers with the long term success of Yearn. Personally, I like the direction this proposal is going, but there a quite a few implications to consider.

Some of the feedback includes concerns about introducing new risk to YFI stakers and including too many changes in one proposal. Both fair criticisms. If you have feedback or would like to signal support — join the conversation here.

📢 I’m covering the Pickle and Cream collaborations because they are important developments in Yearn’s ecosystem and could affect Yearn’s governance decisions in the future. Not because these were governance decisions or proposals.

Pickle & Yearn ferment co-operation dill

One big piece of news this week is the new collaborative relationship between Pickle Finance and Yearn.

Announced by Andre Cronje on Nov. 24, Pickle and Yearn developers have worked out a structure to allow the two projects to work together. The goal is to reduce duplicate work, increase specialization, and to leverage shared expertise.

Here’s the list of changes from the pseudo-merger:

Jars merge with Yearn. Pickle Jars will be deployed as Yearn vaults, using the forthcoming v2 design.
Strategies earn 10% performance fees. Pickle devs will continue to write strategies, earning a 10% performance fee under the new Yearn fee structure.
Reward Gauges are introduced. Pickle tokens are rewarded through staking Yearn vault tokens in Pickle gauges. Rewards can be boosted by a new token, DILL. Reward gauges may earn Pickle based on the underlying Yearn vault token.
DILL boosts Pickle rewards. Pickle tokens can now be vote locked. Locking Pickle yields DILL and the longer the Pickle is locked, the more DILLs received. The minimum locking period is 1 week and the maximum period is 4 years. Holders of DILL can participate in Pickle governance and boost rewards received from Yearn Vault gauges.
CORNICHON tracks Evil Jar losses. A new token, CORNICHON, is created to track losses stemming from the recent Evil Jar attack against Pickle’s Dai Jar. Tokens will be minted against a snapshot of balances at the time of the attack, and distributed to victims proportionally.
Pickle multi-sig rotates. To enable timely development and testing of the new system, the keys for Pickle’s executive multi-sig are rotated.

One concern that popped up after the announcement was that Yearn governance had no say in the collaboration, but this is a misunderstanding of what’s happening.

All of these changes are in relation to the Pickle Finance ecosystem. Anyone can become a Yearn strategist without a vote, new Gauges and emitted PICKLE are Pickle’s (not Yearn’s), and everything else is related to Pickle governance (e.g. the multisig rotation). Therefore, there was nothing for YFI holders to vote on.

If you’re interested in finding more details about this collaboration, read Andre’s announcement post.

Yearn & Cream v2 merger

The second big piece of news this week is the Yearn and Cream v2 merger!

Yearn and Cream developers have teamed up to launch Cream v2. The v2 launch will be focused on core lending and leverage products. Cream v2 enables earning yield with leverage, and is a launchpad for future Yearn & Cream collaborative lending products.

Some of the key takeaways from the announcement include:

Cream & Yearn merge development resources
Yearn vault shares serve as collateral in Cream
Yearn vault strategies get access to leverage through Cream
Cream becomes the launchpad for Stable Credit
Yearn & Cream launch a new 0 collateral protocol credit solution

Despite this merger, many things in the Cream ecosystem remain unchanged. The CREAM token, emission, and supply remains as is. The existing governance process for CREAM remains as is. And lastly, CREAM multi-sig keys will be rotated to facilitate rapid iteration, testing, and deployment.

If you’re interested in finding more details about this collaboration, read Andre’s announcement post.

Bonus: YFI Considered for BNT Mining Rewards

After milkyklim’s push last week, the YFI/BNT pool is being considered for Bancor’s liquidity mining program! Here’s how the program works:

Tokens added to the program receive between 10,000–20,000 BNT per week for 12 consecutive weeks.
70% of weekly BNT rewards emitted to a given pool are distributed to the BNT side of the pool. 30% are distributed to the base ERC20 token side.
Meaning, users who stake BNT in a rewards pool are entitled to a greater share of the rewards.
LPs who leave their BNT rewards unclaimed for 2+ weeks or re-stake their BNT rewards to another pool are entitled to receive a Bonus Rewards Multiplier, which increases their BNT rewards by up to 2X per week.

At the moment, YFI is competing with 12 other tokens for inclusion into the program. To do your part:

Go to Bancor’s Discord and vote for YFI to receive BNT liquidity mining rewards.
Following a 72-hour voting period, the 6 tokens with the most Discord votes move to on-chain voting, where a YES/NO proposal will be created for each selected token.
The 2 tokens with the most YES votes start receiving BNT liquidity mining rewards.

If you’re wondering how this could benefit the Yearn ecosystem, read milkyklim’s post on the governance forum here.