Instead there are reinforcing flywheel effects where tokenomics rewards drive more TVL, that in turn drive more fees, that in turn drive more YFI buybacks, that is then used to reinforce the tokenomics. The authors of the newly passed proposal argued, “The new design does not create a drain on Treasury assets. The proposal leaves the timeline for implementation up to Yearn’s development team and builds on January’s Buyback And Build Yearn (BABY) proposal ( Yearn Improvement Proposal-56). The authors estimate that $30 to $35M worth of YFI will be distributed annually to users who stake their tokens. In 2021, Yearn has been able to buy roughly 300 YFI with profits, according to the authors of the newly passed Yearn Improvement Proposal. YFI remains around $8,000 behind the price of BTC. “The spot market is just so thin and buybacks + locking haven’t even started yet.” And it’ll certainly see $100k before BTC does,” Cinneamhain Ventures’ partner Adam Cochran tweeted this weekend. YFI’s long-term fundamentals remain bullish despite. The coin seems to be dropping due to a wider bout of weakness in DeFi, caused by a number of trends. The YFI coin is down over 33 from its all-time high price set just weeks ago. “At this pace 1 $YFI will be more than 1 $BTC any day now. Decentralized finance’s Yearn.finance (YFI) has dropped 10 in the past 24 hours despite strength in Bitcoin. Decentralized finance tokens have struggled to hold value this year even as more and more people use DeFi. Yearn is following the lead of automated market maker Curve Finance, with the revamped tokenomics intended to limit liquid supply and foster long term price appreciation. YFI is trading 35% higher since the vote closed on Dec. The proposal passed with 99% of YFI voters supporting the change. Yearn will use protocol profits to buy YFI tokens off the open market and distribute it back to stakers, while also maintaining a fixed operational fund of $30M. Once implemented, holders of its YFI governance token will need to stake their tokens to participate in governance, but in doing so they will be able to earn more YFI. Yield aggregator Yearn Finance has closed the vote on its new tokenomics. Yearn has decided to make governance pay.
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