If i am not wrong, YUSD do have a 15% annual interests. Could we use a percentage of this income to do an airdrop to YAM holders to show the treasury income can bring value to Yam holders? I used to post a lottery proposal, it may be too risky, but interests airdrop should be safe and relatively easy to implement?
This doesn’t make sense to me from a capital efficiency standpoint. If interest from the yUSD (or other tokens) in the treasury is the only thing keeping people in the ecosystem then we are in trouble since they could just invest directly in those same tokens and get significantly better returns.
Pushing for short term returns for YAM holders is at the expense of using that money to build products that should yield greater returns over the long term.
dont agree, buy yam is better
but now people simply dont believe treasury has any relationship to them, they just thought they got blood sucked by the treasury. A little bit reward can turn the mindset easily. I am not saying using a lot of treasury just a percentage from the interests.
It might not be a bad idea. The most efficient way to grow the treasury in the early stage is from positive rebase which requires buyer interest. Consider if we have some mechanism like how sushi can be staked for protocol reward. It gives people reason to buy and stake YAM which can ultimately lead to a prosperous cycle of positive rebase -> bigger treasury airdrop -> buyers -> positive rebase
If we destory the confidence of the community, there will be noone buying the token again. The treasury will be 3m forever. We have to make the positive circle to make people feel the treasury grows benefit them and willing to buy and hold more yam to help the treasury growth.
We are all talking about the growth of the treasury all the time. But we forgot people who bought and hold yam before the V3 rebase are the biggest contributors to the treasury. Now we are simply destroying those people. Those people are telling other people dont buy, cause they contributed to the treasury and got nothing back, some of them lost 90% of their investment. Now the treasury is not willing to share like 5% of the interests of the treasury…I dont know how people think about it, but this is the most cold hearted thing i’ve even seen. I am pretty sure with this set of mindset, this project wont reach the vision it want to be…
It is necessary to airdrop a portion of the funds to the initial holders to increase community confidence in the project.
i like this idea. I think its definitely worth testing a promotion like this.
The point I am trying to make is that this is not going to have the effect that you want. right now yUSD is earning about 6% APR (this is variable). The size of the treasury is a little less than 3 million with the YAM marketcap of about 10 million. That means that if ALL the interest went straight to YAM holders, they would get less than a 2% return (in USD). Is this really going to bring in new buyers when you could get much more doing something else (buying yUSD directly)?
Many think the treasury should be used to fund projects, converted to other crypto, etc. So these funds would not be in yUSD and therefore not earning interest. So lets say that half of the treasury isn’t earning interest. Now YAM holders get 1% return.
Even if you argument is that this 1% yield gets added to the existing value proposition of the YAMs token (which IMO is using the treasury to build out products and strategies that grow the treasury), it still isn’t worth it. Why not? Because leeching the yield from the treasury directly hurts that value proposition and you have now also limited the funds available to use in other ways to grow the treasury. All for a measly 1% usd return.
No amount of skimming interest off the treasury is going to recoup the losses of people who bought YAMS with a 100 million dollar marketcap. I know it’s hard to hear, but it’s true. The way to do that is to have patience and help build products that add NEW revenue streams to the treasury.
But no one can guarantee other ways like new products or asset allocation will surely grow the treasury. Some of them may not even earn, they may directly lead to a loss. This is crypto market, no one knows what will happen. If this happens, the treasury is sinking instead of growing.
The point i want to make is, why not just make the token back to the positive rebase and grow the treasury the way it designed. To achieve this, using some directly ways to boost the market confidence may work better than build products which no one knows what will happen.
but all in all, no one can prove who is right or wrong until the thing comes to real. So i guess we just wait for the product and see.
The APY is variable and as yearn upgrades their vaults we can expect higher payout to yam holders as time goes on. Right now there’s nothing to do with yams except sell them as they unvest before it declines further. The right choice at almost any point in life cycle of YAM has been to sell it as quickl as possible.
A small dividend can at least demonstrate that YAM has capability to return capital and can break this stigma giving confidence back to holders.
At any point the community could vote to do this, if only to prove that they can. But I am saying that it is not in the long term interests of YAM token holders. The “life cycle of YAMs” has been 2 months. Would you expect a normal start-up to start returning dividends to you after 2 months of existing?
If your answer is yes, then I recommend you don’t invest in start-ups.
The effectiveness of the YAM protocol is heavily contingent upon developing positive rebase cycles early on to grow the treasury. I believe trading 5-15% APY of our small treasury to demonstrate the technical capability to our holders will give confidence and bring us closer to positive rebase ultimately funding the treasury in more effective manner.
This is where we disagree. I strongly believe that in order for YAMs to be successful, it needs additional revenue streams to grow the treasury beyond just positive rebases. That growth will then lead to more demand to hold YAMs and push the price higher, further growing the treasury. Holding YAMs now should be based on an expectation that these new revenue streams are coming, not on the ability to pillage the treasury.
I totally agree with your critique. Pay-to-stay schemes keep people faithful for the short-term. It sets a bad precedent, since current/holders may expect the same again in the future.
I worked in a couple of startups, one of them received 15millions of VC, they still fail to make revenues after 4 years. The other one received about 5million and got acquired with a very low price (much lower than 5million) after 4 years.
Crypto investors dont have the risk control as a VC. If the project wants to run as a startup, it should warn investors in a VERY clear way.