Yearn Finance Newsletter #11

Week Ending November 15th, 2020

Welcome to the 11th edition of the Yearn Finance Newsletter. Our aim with this newsletter is to keep the Yearn and the wider crypto community informed of latest news, including product launches, governance changes, and ecosystem updates. If you’re interested in learning more about Yearn Finance, follow our official Twitter and Medium accounts.

Summary

  • Four Important YIPs Have Passed

  • YFI Accepted as Collateral on MakerDao

  • Yearn x Hegic: Binary Options 

  • Airdrop for Yearn Governance Participants

  • Yearn State of the Vaults

  • Governance Updates (YIPs)

  • Ecosystem News

  • Resources

Four Important YIPs Have Passed

It has been an eventful week for Yearn governance and several important YIPs have passed: YIPs 51 - 54. Summaries of these YIPs are below. 

YIP-51: Set Vault v2 Fee Structure

This proposal altered the fee structure for the upcoming v2 yVaults release. Fees for v2 yVaults will now implement a 2% management fee for assets under management (AUM) and a 20% performance fee for profits from the yVault. Fees for v1 yVaults (current version) are a 0.5% withdrawal fee and 5% for subsidized gas harvests. This YIP only affects fees for upcoming v2 yVaults, and does not change the fee structure for v1 yVaults. 

Voting concluded on November 9th with over 99% of the vote in favor of the YIP. You can view the final vote here

YIP-52: Make Strategist Skin in Game Partner for Make Benefit of Glorious Brain of Yearn

This proposal will increase the incentives for Strategists in order to create new and profitable yVaults for our upcoming v2 yVaults. YIP-51 defined a 20% performance fee for v2 yVault profits. This 20% fee will now be split between Yearn treasury and the Strategist of the yVault. Our aim is to attract and retain the best minds in DeFi to create strategies that will benefit the Yearn ecosystem. Previously, Strategists received 10% of the subsidized harvest fee (5%). 

Voting concluded on November 12th with 83% of the vote in favor of the YIP. You can view the final vote here

YIP-53: yAcademy: Planting the Seed of a Sustainably Secure Future for Yearn and Beyond

This proposal will establish an internal smart contract security audit team that will audit Yearn’s smart contracts and eventually other smart contracts within the Ethereum ecosystem. Equity within yAcademy will be split between Yearn governance (65%), Gitcoin (10%), Status (10%), and 15% to the first five members, 5%, 4%, 3%, 1.5%, and 1.5%, respectively. 

Smart contract auditing is a costly, yet important expenditure for the Yearn ecosystem. This YIP aims to bring the majority of this cost in-house and realize potential cost-savings. Additionally, the yAcademy will potentially be a revenue-generating entity if it engages in smart contract audits for other projects within the Ethereum ecosystem.

Voting concluded on November 14th with nearly 100% of the vote in favor of the YIP. You can view the final vote here

YIP-54: Formalize Operations Funding

This is a multi-pronged proposal that will establish an Operations Fund effective with the upcoming launch of v2 yVaults.

Key specifications of this YIP are as follows:

  1. Effective with the introduction of Vaults v2, allocate 50% of Treasury fees to an Operations Fund, with the other 50% distributed to YFI stakeholders.

  2. Permit the Operations Fund to buy YFI or any other asset as required with its funds, and to include such in the assets at its disposal.

  3. Produce quarterly financial reports of the Operations Fund activities and decisions.

  4. As it goes in effect, the Operations Fund replaces the treasury cap of YIP-36 and the budget of YIP-41.

  5. The Operations Fund, its asset purchase authorization, and the other matters contemplated herein are not permanent, and can be altered or replaced by YFI holders as required, through the passing of a new YIP. 

Voting concluded on November 15th with nearly 100% of the vote in favor of the YIP. You can view the final vote here

YFI Accepted as Collateral on MakerDao

We are proud to announce that YFI is now accepted as collateral on MakerDAO. YFI holders can deposit their YFI to open a collateralized debt position (CDP) and use it to mint DAI. In just a few short days over 1,110 YFI was locked in CDPs and used to draw 7m DAI, which is the debt ceiling for YFI defined by MakerDAO governance. There have been discussions to increase the debt ceiling for YFI so that more DAI can be minted, however, as of the date of publication the debt ceiling has not been increased.

The acceptance of YFI on MakerDAO’s system is an important milestone for the Yearn ecosystem as it opens up the possibility that YFI can be used to mint DAI in upcoming v2 yVaults that utilize YFI as the base asset. 

You can access the MakerDao vault portal here

Yearn x Hegic: Binary Options

Yearn contributor Andre Cronje has been working with Hegic developer Molly Wintermute to create binary options that can be used to hedge price volatility for certain assets. Hegic is a decentralized protocol that enables on-chain call and put options. The introduction of binary options opens up Yearn yVaults to additional strategies while also mitigating price declines in the underlying assets, which would adversely affect depositors. 

Binary options would settle in DAI and would enable liquidity providers to keep their positions delta neutral from changes in the underlying asset prices, while also benefiting from optimized yield available from liquidity provisioning. Work in this area is still ongoing, but it represents promising advances in risk management that could be used in future yVault offerings.

You can read the blog post regarding binary options here

Airdrop for Yearn Governance Participants

Later this month the $BADGER governance token will launch and 10% of the $BADGER supply will be airdropped to over 20 protocols and initiatives. The Yearn Finance protocol is one such protocol that has been selected. Anyone that has participated in Yearn governance in the past is eligible to receive a $BADGER airdrop. 

You can view their announcement here

Yearn State of the Vaults

You can read our weekly synopsis regarding Yearn’s yVaults, including current strategies and upcoming changes here

Governance Updates (YIPs)

You can read our weekly governance roundup discussing newly proposed, on-going, or passed governance proposals here

Ecosystem News

Proposal to formalize the YIP introduction process

Value DeFi’s MultiStables vault exploited for $7.4 million

On-chain oracle price manipulation article by Samczsun

SushiSwap yVault testing underway

First step to contributors stash YIP passed

Yearn Finance x Hegic = A look inside An Options Fortune Teller’s Vault

Purchased Hegic call options using yVaults as LP

Insights on the new yveCRV “Backscratcher”

Ability for strategies to report realized losses to yVaults

Polychain Capital purportedly purchases more YFI 

YFI supported on Monolith’s wallet

Proposal to increase the debt ceiling for YFI on MakerDao

Resources

YCosystem: Aggregator of Yearn community links

Yearn Docs

Y.finance: Development Yearn frontend

Yearn Governance Forum

Yearn Snapshot Vote Signaling

yGov Finance: Yearn on-chain voting

yGov Rocks: Alternative voting and claiming portal

Learn Yearn: Yearn education and explainers

Yield Farming Info: Yearn Vault APYs

Feel the Yearn: Yearn Vault APYs, wallet holdings, and earnings

Stats.Finance: Yearn Vault APYs, value locked in yVaults and Strategies

yVault ROI: yVaults ROI for any wallet address

Yearn ROI: Estimate future yVault ROI

DeFi Marketcap: Yearn Vault and token marketcaps

Add YFI and yUSD to MetaMask

Recycler: Zap multiple stablecoins into yUSD Vault

yVault explainer graphics by DeFinn