What started as a simple governance proposal to build a war chest for the the Yearn.finance development team has now spilled over into a wider conversation about incentivization, sustainability, and fair project launches in the decentralized finance (DeFi) space.
On Wednesday, Jan. 13 five Yearn community members including multiple core contributors proposed a “Buyback and Build” program that would divert protocol fees towards bolstering the treasury — a proposal that would alter the current system which distributes a dividend to governance participants. The proposal has since been nicknamed ‘BABY.’
In an interview with Cointelegraph, semi-anonymous Yearn core contributor and one of the co-authors of the proposal, Tracheopteryx, said that BABY is meant to allow for superior sustainability at Yearn’s current stage of growth.
“We are proposing to stop paying out protocol fees as dividends to YFI stakers in governance and instead use this revenue for an automated YFI buyback, reinvesting it into growing Yearn. Our core argument is pretty simple: 1) dividends don’t make sense for our early stage of development, and 2) there are better returns available for YFI elsewhere,” he said.
Mint more YFI?
Just a day before the BABY proposal was published, however, another proposal written by a lone community member which was also aimed at sustainability attracted far more debate on the Yearn governance forums.
Titled “**[Proposal]** Developer Incentives,” it called for the minting of an additional 1000 YFI tokens on top of the original 30,000 — tokens which would be distributed among the core team at their sole discretion in order to incentivize ongoing development.
Core Yearn dev banteg posted a link to the proposal on Twitter on Thursday, setting off a flurry of impassioned debate that rippled out to the wider crypto community:
Proposal: yfi_lit suggests printing 1000 YFI for operations fund to give Yearn years of runway at a cost of 3% dilution. The…