Thread by @lex_node

little by little, the yearn community is figuring out this 'decentralized governance' thing, and I think the key was tightrope-walking without a safety net

if you have a VC-backed company as a safety net, the tokenholders are more likely to engage in dangerous antics

https://twitter.com/bantg/status/1318524239880900608

having one set of funds that comes from system fees both justifies the existence of a governance token and keeps its holders disciplined

the devs now answer directly to the token holders, can get hired and fired by token holders, and the governance matters

securities law arbitrage attempts have led to totally the wrong incentives--i.e., for devs at a VC-backed company to hide their token-value-increasing efforts, be coy about whether they will affect the token, and not take direction from the community to avoid duties

everyone has been terrified of any kind of delegation, because of securities laws

but because YFI didn't have a structural imbalances in its token distribution, there is less worry there

they embraced 'constrained delegation', which is far more effective than referendum

so, now you have in YFI a 'governance token' that is closer to living up to that term & is what I have always said is the aspiration of nearly all tokens--to be a 'share of network equity' or a 'share of protocol equity'

many will say--'that's bad, a share is a security'!

I say: "it depends"

In this case, the YFI holders are not only the shareholders--they are also the board of directors, & from a regulatory point of view, this should be a decisive difference.