Yearn Finance price bleeds as 95% of the YFI community opposes latest proposal

  • Yearn Finance price has declined 3.54% on the day as the community voted against a proposal to loan nearly $2 million to market maker Wintermute. 
  • The market maker has requested the community to approve a loan for a 12-month period at 0.1% interest. 
  • Nearly 95% of the community’s votes were against issuing a loan to Wintermute for purchase and staking of tokens in a CRV pool.

Wintermute, a crypto market maker, requested Yearn Finance community members for a loan of 350 YFI tokens, worth approximately $1.98 million from the DAO treasury. The market maker intends to use the loan to purchase yCRV tokens and deploy them in the yCRV-CRV liquidity pool.

Also read: Genesis creditors closer to recovering $630 million in funds lost to bankrupt lender

Yearn Finance community not on board with Wintermute’s plan to generate yield

The crypto market maker is keen on generating extra yield. For the same, Wintermute proposed that the Yearn Finance DAO offer the market maker a 12-month loan of 350 YFI tokens, at an interest of 0.1%.

As per the snapshot of the proposal, 177 members have already voted, of which, 167 or 94.17% are against the issuance of the $1.98 million loan to Wintermute. The community members rejecting the loan believe it is an unfavorable deal for the YFI community. 

Voting ends at 03:34 on August 31, Beijing time.

Snapshot of the vote on the proposal

Snapshot of the vote on the proposal

The market maker has been attempting to shore yield by approaching DAOs for loans and  to convince the community members that it would support markets for Yearn’s yCRV token. Voters believe that the proposal is unfair to the community of YFI holders and believe that Wintermute is trying to “extract value” from the crypto projects it supports. 

Why the deal is unfavorable to the Yearn Finance community 

By securing YFI tokens, Wintermute will stake it in a yCRV-CRV pool to generate higher yields and leverage its own CRV tokens at minimal cost. However, Yearn Finance’s community members see minimal upside for the project.

At its core, Yearn is focused on decentralization and loaning out its governance token to a market maker does not seem favorable to the ethos of the DAO.

At the time of writing, YFI token price yielded 3.57% losses in the 24-hour timeframe. The token continues to bleed as the community of voters reject the market maker’s request.

Bitcoin, altcoins, stablecoins FAQs

What is Bitcoin?

Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.

What are altcoins?

Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.

What are stablecoins?

Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.

What is Bitcoin Dominance?

Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.

Like this article? Help us with some feedback by answering this survey:

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Join Telegram

Recommended content

Recommended Content

Editors’ Picks

Digital asset inflows reach record high year-to-date

Digital asset inflows reach record high year-to-date

Digital asset investment inflows saw a three-week consecutive rise, totaling $1.05 billion. Cumulative flows have hit an all-time high of $14.9 billion for the year. The majority of inflows come from US Bitcoin ETFs at $1.01 billion.

More Cryptocurrencies News

Bitcoin long-term holders begin re-accumulation after Semler Scientific and Mt Gox make major whale moves

Bitcoin long-term holders begin re-accumulation after Semler Scientific and Mt Gox make major whale moves

Semler Scientific takes a page from MicroStrategy's playbook with $40 million BTC investment. Mt Gox has yet to begin repaying users despite $9.6 billion BTC transfers across several addresses.

More Bitcoin News

Ethereum may continue outperforming Bitcoin as 'programmable money' may be ETH's new slogan

Ethereum may continue outperforming Bitcoin as 'programmable money' may be ETH's new slogan

Ethereum (ETH) followed a sideways trend on Tuesday as the crypto community seems to favor the term 'programmable money' as ETH's one-liner. Meanwhile, whales have continued accumulating ETH despite profiting from the recent price spike.

More Ethereum News

Pepe sell signal hints at 20% crash before bulls come back Premium

Pepe sell signal hints at 20% crash before bulls come back

Pepe (PEPE) price has shown resilience in the past two weeks, with the most recent rally nearly doubling the meme coin’s market value. However, due to the nature of the recent impulsive move, investors can expect a short-term correction, which could be an opportunity for patient and long-term buyers.

More Pepe News

Bitcoin: BTC struggles, but $80K is at striking distance Premium

Bitcoin: BTC struggles, but $80K is at striking distance

Bitcoin (BTC) price is in a good position to resume the bull rally despite the recent struggle. Optimism will restart if BTC overcomes a critical hurdle and flips it into a foothold. In such a case, the pioneer crypto will be slated to push to a new all-time high (ATH). 

Read full analysis