The pay for current dev and supports don’t come from this, this is a “core dev managed fund” where we give control to core devs to pay for misc development with a monthly or x days transparency report.
So putting aside whether this YAM is “from the treasury” or not, what you’re suggesting on 1 & 2 is exactly what this proposal is.
Yep, just agreeing with community.
I think the only additions is that the pay is fixed per person for a fixed amount of time and the dev slush fund.
We do have a fixed time on this YAM allocation (3 years). As for the exact pay per person, I don’t think that’s within scope of this proposal right now. It’s unrealistic to try and set that as the core team is still small and being established. This setup gives them the flexibility to be aggressive in bringing on new talent, recruiting people, etc. And as you said, it would certainly be understood/expected to have full accountability/transparency on where the funds go.
Yeah, I guess I would like the time constraints to be a bit shorter and also spending to be a bit more definitive rather than giving the core devs carte blanche for 3 years.
- Core devs get $10,000 per month for 6 months or a year with a full time commitment to the project.
- Core devs get a slush fund of 2% of current treasury and future rebases to spend on the community supporters and anything else they need.
- These items are adjusted every 6 months or a year.
- The core devs should run like a business or a board of directors to make decisions on how to spend the money from the slush fund.
The numbers are examples, but I would prefer this solution.
In most early-stage startups, the primary compensation come in these forms:
- Base salary – what’s required to pay your bills (rent, food, etc)
- Ownership (in the form of equity grants/options) – the incentive alignment, the upside potential, the type of thing that could make you filthy rich if it works
Due to legal/tax/regulatory considerations, for US workers (currently most of core team), we cannot have #1. However, we should certainly expect that core team still has to pay bills and may need ongoing support so they can stay focused on YAM. This is why we’re trying to set the precedence that contributors can get paid retroactively for that type of work. See this proposal for precedence to be set: Draft Proposal: Retroactive Compensation For YAM Contributors
So this proposal here is really about #2. The upside. The ownership. The YAM token incentive alignment. This is not meant to be the “pay your bills” compensation. This is meant to be the “core team will get filthy rich if they make YAM protocol a success.” And that’s good. Because that’s what we want. If they get filthy rich because of YAM tokens, then so will we! That’s aligned incentives. That’s a beautiful thing.
When new protocols launch, they reserve n% for the team to have. This is the equivalent of that. It isn’t salary. It isn’t to pay for groceries. It’s so that they have a big, juicy carrot in front of them to chase. And if they are successful in that chase, we ALL win.
I have a clearer understanding now, but I am still cautious about:
Best case this is great for everyone, worse case this could be a disaster that will end up with Devs dumping on Yam hodlers.
I need to rethink this and offer a suggestion.
This proposal includes the compensation vesting over 3 years. Kind of hard to dump with that
More worried about core dev team in fighting with what to do with the slush fund. When it comes to unstructured money, IMHO it is very dangerous.
It always ends in someone getting hurt which will in turn effect Yam as well.
I just realized that this is my basic complaint for the treasury.
Lack of structure = Lack of productivity in most cases.
Worth noting if there were ever issues and the community thought the fund was being unproductive, it could technically be clawed back by governance
Minting additional tokens in no way counters the fair launch narrative, as it is a governance action performed by tokenholders of that fair launch. I don’t follow the logic here.
In general, I am failing to see a coherent argument for why it does not make sense to mint in order to fund initiatives like this –– I am only seeing people say they don’t like it for some reason.
The reason to NOT use the treasury is that the treasury forms the core book value of YAM. There is significant damage done to the value of YAM if we choose to deplete the treasury, especially when more capital efficient ways can achieve the same goal. Yam can spend XX% percent of the treasury’s real dollars to fund this, or Yam can spend $0 to fund this.
There is very little done to the value of YAM by minting additional supply, especially considering that minted YAM is vested over 3 years.
And again, it was ALWAYS assumed that the protocol would mint additional YAM to fund initiatives like this – because it is the most capital efficient way to do so!
I also want to add that there is a very real downside to using the treasury to purchase the YAM on the market, in that any slippage on that purchase is money lost from the YAM ecosystem and goes directly to arbitrageurs. Minting YAM for this preserves more capital inside the YAM ecosystem
I’ll agree, but then what do we do with the treasury?
Turn it into 100% asset allocation strategy?
I think the treasury can be used for some development initiatives, especially specific contract work. But we’re talking about long-term upside here that is explicitly meant to be paid in YAM. When we can pay in YAM, we should pay in YAM by printing.
But yes, I’m much more interested in using the treasury for investing, yield, and seeding liquidity in financial protocols that YAM develops (using it to be lent out in exchange for YAM collateral for instance).
Thanks for explaining this, @flygoing.eth. The community can see now the technical cons of buying yam on the market; there’s slippage and arbs happening 24/7 so lose money from the treasury purchasing it.
The very reason actually @trente is this will dilute the current yam token holders. Basically, it’s unfair for the general yam community. Though, I’m starting to re-calibrate this reasoning since I’m sold by your strong arguments and your long-term dedication in building the YAM Protocol. The same goes to other core and contributing teams.
I’m quoting these arguments so yam community can see these explanations and reassess again their bench. Thanks @trente!
Totally agree !
Every member here must care about yam price. Investors get hurt, they get hurt.
Their working and payment is meaningful with only the price goes up to increase the market cap.
It’s terribly wrong to only focus on treasury’s growth but ignore yam price and investors’ feedback.
agreed, dilution is the price! finally someone put it to words
here’s some numbers to help explain as well:
say we want to do 200k BoU, that’s about 1M Yams, about $800k of treasury funds. so we could deplete the treasury by ~30% by paying $800k, or we could pay 0 dollars and dilute holders by 4% over the next 3 years.
dilution is preferable because it retains the existing market cap and our ability to fund specific development initiatives and deploy capital – things we can’t do in YAM. decreasing the treasury on the other hand, lowers YAMs fundamental value and will likely lead to a hit to market cap, especially if it’s not on a specific revenue boosting expense that will generate future ROI (like a new protocol or ecosystem development for instance)
not to mention slippage on that $800k purchase.
mick put it well at one point: we can mint YAM, we can’t mint yUSD. to purchase yUSD with YAM is to undue the work and pain that LPs have gone through to build the treasury.
Yes, I just wanted to re-iterate this point.
As someone who has been LPing basically the entire time since v3 (and constantly LPing newly farmed YAM), I would be disappointed, frustrated, and demoralized if the community decides to take that hard-earned yUSD and decides to unwind those rebase treasury purchases back to YAM. We’ve gone through a lot of sacrifice and pain to build up that treasury! Let’s not throw 30% of it away on something we can mint ourselves!
I know that psychologically it may seem like a better idea to have a YAM buy back. I’ve had a front-row seat at token buy backs / burns (Sushi being the most recent). They really don’t have a material impact on price/MC. It’s a total waste of treasury resources. I believe spending 30% of our treasury on buying YAM would be a terrible decision.
The core team and contributors should be compensated for their hard work and future work. I approve of aligning their incentives with the success of the YAM project. We can do that by paying them in YAM and requiring multi-year vesting.
Using the treasury to buy YAM and award the team is one option. But depleting the treasury is bad for optics and the long term success of the project. And I agree this would frustrate users who helped build that treasury and feel entitled to their portion of those funds. This is sub-optimal.
Minting new YAM that is vested over a 3 year period is a better option, IMO. This should have a negligible effect on overall token supply, will keep the treasury untouched, and will finally align the team with the success of YAM.
I am 100% in support of minting new YAM that is awarded to the team and core contributors over time.
But that’s why it vests over 3 years, which helps to prevent dumping.