decrypt.co
Yearn.finance’s creator, Andre Cronje, today proposed a measure that would prevent new YFI tokens from being minted.
In an online poll today Cronje proposed to the community: “Burn the timelock on the YFI token so that no minting can ever take place again.”
If the proposal passes, this would permanently cap the supply of YFI, the governance token for yearn.finance. Right now, the token has a total supply of 30,000. If the minting function is removed, it would stay that way, and those invested in the project would be unable to create more.
https://t.co/hhLPp2Jwb5 on-chain governance will be deployed within the next ~2 weeks (audits dependent).
As the first official on-chain enforced governance vote I propose burning the YFI minting capability permanently.
Please signal intent on https://t.co/E323w1DKza
— Andre Cronje (@AndreCronjeTech) September 12, 2020
This would, in theory, curb inflation on the token and prevent people from using yearn solely to earn YFI tokens or manipulating the protocol’s governance systems. Cronje has said previously that the frantic buying and selling of governance tokens isn’t sustainable.
What is YFI?
YFI is the token for yearn.finance, the second biggest DeFi tool by market cap and the fourth biggest project by total value locked in. Yearn.finance is a yield aggregator, meaning it shifts users’ funds between different lending and liquidity protocols to get the best interest rates.
YFI is its governance token, meaning those who hold it are able to vote on making changes to the project. It is earned by locking funds in yearn.finance.and its value has exploded this year. The cost of a single $YFI token today peaked at $41,210, per CoinMarketCap.
So far, the yearn.finance community appears to be in agreement. On a governance poll, 99.97% have voted in favor of Cronje’s proposal. To do so, voters have so far staked 333.11 YFI, currently worth $1.3 million.
Comments on the proposal showed people voting with Cronje in creating a scarce supply. One said: “Scarcity is a massive strength and something that separates YFI from other projects with ongoing minting schedules.”