Yearn Finance Proposes Using Staking Funds to Buyback YFI
DeFi blue chip project Yearn.Finance is proposing to use the staking funds for buyback- treasury, and it is being received well with a good 93% majority votes, out of 177 so far.
These YFI will be repurchased on the open market and then used for contributor rewards and other Yearn initiatives like security audits, bug bounties, contributor funding, grants, gas reimbursement, and development overhead until further notice.
While staking will cease, the buyback would be “handled in a continuous and automated way.”
This move is more suitable at this stage of the project’s life cycle and aligns more with YFI’s use case by catering to those “who take interest in the protocol and wish to actively participate in its improvement, over those looking to passively collect staking income,” argues the proposal.
Staking returns are already weak; with the APY estimate at 0.9% annually, which may dissuade YFI holders from participating in governance, the proposal adds, not to mention Binance recently announced 4.49% APY for staking.
As per the proposal, this will benefit the entire Yearn ecosystem by simplifying Treasury design and operation and YFI token mechanics. Also, the Treasury could be then deployed for various uses.
As for YFI holders, it will remove the need to stake YFI to enjoy rewards, making gains more tax-efficient, and “buybacks should benefit every YFI holder.”
With no staking, it further proposes returning the YFI governance vault (yGov) as it long longer has any use and replacing it with a regular vault.
Moreover, the community has to vote to make it possible for YFI holders to participate in governance, even if their YFI is elsewhere.
The proposal also mentions future possibilities in terms of a contributor retention program, re-introducing dividends once Yearn has matured, and introducing a conventional vault.
Meanwhile, the governance token YFI is trading around $33,730, down 22% from its ATH of $43,678.