Uptober 20, 2023: veYFI 💡🎉
Yearn's tokenomics upgrade and its effect on the flywheel
Congrats to the bespoke devs at Yearn, who shipped the much anticipated veYFI after years in the oven.
The much-”wenned” new tokenomics expands upon the Curve veTokenomics, which allows for an early exit from locking with a penalty fee redistributed among veYFI holders.
A few lengthy posts to click to dive deep into these changes:
Why the focus on Yearn in a Curve newsletter? In our view, as goes Yearn, so goes Curve. Earlier this week, the great Marco Worms published a breakdown of Yearn vault allocations, and Curve was the plurality destination for Yearn vaults.
For the first epoch of the new veYFI era, the community appears to be most excited about $dYFI. In the new tokenomics, users stake vault tokens to earn $dYFI rewards. $dYFI is an ERC-20, and users can redeem discounted $YFI directly for $ETH, which gets routed to buybacks.
Although, it’s worth keeping an eye on how the Yearn-wrapped $CRV will hold up in the new paradigm. The price of $yCRV has been trading at a slight discount for much of the past month.
All things considered, Stake DAO may end up the biggest winner from all the developments. For one, Stake DAO’s $sdCRV is holding up the best at the moment, partly thanks to the protocol’s Votemarket and integration with Aladdin DAO.
Incidentally, this redounded to the benefit of yield farmers…
The protocol has also been quick to set up a liquid locker for the new $sdYFI, and become the largest holder of $veYFI in the process.
Meanwhile…
It really is becoming the case that there’s more flywheel news than our daily newsletter can cover. Bullish Leviathan News…
Hopefully you’ve heeded our occasional reminder to subscribe to Cryptouf’s Mirror, which provides a comprehensive weekly overview of everything in the flywheel.
We won’t rehash absolutely everything covered within the newsletter, but do want to add some commentary on a few points. Cryptovestor notes that Protocol f(x) will be expanding towards BTC at a time when the leading crypto is on a tear, flirting with $30K for the first time since July.
More importantly from Cryptovestor, the news that $3CRV may be replaced by $crvUSD as a fee token.
