The YAM treasury would purchase f-tokens (fUSDC/fUSDT,fDAI) rather than y-tokens(yyCRV/yUSD).
- Currently the f-tokens are generating a much higher yield than the y-tokens (around 2-3x as much)
- Harvest Finance has been laser focused on finding high-yield opportunities and seem very intent in adjusting their f-token strategies with the quickly changing farming landscape. I believe this means that the f-tokens yield will likely continue to outperform other yielding stablecoin tokens.
- The opportunity to collaborate with another budding community and built net-positive synergies between our two platforms and communities
f-tokens are riskier than yUSD therefore it will be a tougher sell to the YAM community to hold them over yUSD. To mitigate this risk I would additionally propose that in return for YAM becoming a guaranteed purchaser of f-tokens that Harvest Finance sends the YAM treasury an amount of FARM tokens (this detail would be worked out later on). The YAM community would then be free to vote on what to do with these FARM tokens, whether to stake them for additional yield, sell them, or both.
As an additional risk mitigation measure I also suggest the YAM community agree to allow the YAM treasury to purchase smart contract cover for f-tokens. The cost of smart contract cover is extremely low (1-2% annually) versus the yield (100-400%) which offers a massive way to mitigate smart contract risk for an almost negligible cost.
Finally, Harvest Finance is undergoing 2 audits currently and I believe they have signaled an intent to have a 3rd and possibly 4th. This would make their protocol one of the most audited of all recent food protocols.
I believe this proposal offers a number of benefits: much higher yield on our treasury assets, synergy between our two communities and protocols, and the building of goodwill for future collaborations.
The YAM treasury is one of the most powerful, positive-sum, value add components of the YAM protocol. I believe this proposal could turn on the afterburners and send it on a moon mission