The current @yieldbasis proposal is very dangerous for @CurveFinance, I'll be voting "No".
This vote is extremely extractive from CurveDAO and the implications of this vote concern me for the future of the protocol.
My Concerns:
1. Economic Risk -
No third parties evaluated the economic risks of the protocol, only the Yield Basis team.
This credit line should be capped on a percentage basis of $crvUSD TVL. Individual wrapped assets ($wBTC, $cbBTC, $tBTC) and their pools also need caps to prevent systematic risk to $crvUSD.
There are no guardrails at all currently as the proposal was written by Yield Basis.
2. Hack Recovery Plan -
The way this is structured, a Yield Basis Hack is the responsibility of @CurveFinance.
$crvUSD TVL is $250M. If any $crvUSD in the LPs are drained, the balance sheet hole will be too large to fill. The whole $CRV ecosystem would likely go to zero while Yield Basis takes on no liability.
$YB would be free to launch on top of another stablecoin ecosystem the next day leaving CurveDAO with all the $crvUSD debt.
3. Transparency - The Yield Basis seed round participants and their allocations have not been disclosed to CurveDAO.
Devs/Founders from within the ecosystem did not disclose their seed stake in $YB and will be voting with delegated votes.
4. Clear Incentives and Compensation -
$YB hasn't released full details of their tokenomics or incentive systems.
Yield Basis also plans to pay for Curve licensing through bribes. This is a cost to CurveDAO as emissions are paid. They shouldn't be paying emissions on another protocol using their technology.
Conclusion -
This proposal at scale gives $crvUSD a single point of failure that is entirely controlled by a third party protocol (YB).
There are massive conflicts of interest all over this that need addressed. There is also absolutely no excuse for the lack of transparency when requesting a $60M+ credit line.
CurveDAO needs to protect themselves here first, and Yield Basis should come second.
These requests aren't extremely time consuming and should benefit both parties to discuss.
My concerns were posted 10+ days ago to the discussion page, I haven't received any response.
It's worth noting, I will gladly vote in favor of a @yieldbasis credit line if the glaring risks and transparency issues are addressed.
(Discussion Page - gov.curve.finance/t/create-a-crv… )
This vote is extremely extractive from CurveDAO and the implications of this vote concern me for the future of the protocol.
My Concerns:
1. Economic Risk -
No third parties evaluated the economic risks of the protocol, only the Yield Basis team.
This credit line should be capped on a percentage basis of $crvUSD TVL. Individual wrapped assets ($wBTC, $cbBTC, $tBTC) and their pools also need caps to prevent systematic risk to $crvUSD.
There are no guardrails at all currently as the proposal was written by Yield Basis.
2. Hack Recovery Plan -
The way this is structured, a Yield Basis Hack is the responsibility of @CurveFinance.
$crvUSD TVL is $250M. If any $crvUSD in the LPs are drained, the balance sheet hole will be too large to fill. The whole $CRV ecosystem would likely go to zero while Yield Basis takes on no liability.
$YB would be free to launch on top of another stablecoin ecosystem the next day leaving CurveDAO with all the $crvUSD debt.
3. Transparency - The Yield Basis seed round participants and their allocations have not been disclosed to CurveDAO.
Devs/Founders from within the ecosystem did not disclose their seed stake in $YB and will be voting with delegated votes.
4. Clear Incentives and Compensation -
$YB hasn't released full details of their tokenomics or incentive systems.
Yield Basis also plans to pay for Curve licensing through bribes. This is a cost to CurveDAO as emissions are paid. They shouldn't be paying emissions on another protocol using their technology.
Conclusion -
This proposal at scale gives $crvUSD a single point of failure that is entirely controlled by a third party protocol (YB).
There are massive conflicts of interest all over this that need addressed. There is also absolutely no excuse for the lack of transparency when requesting a $60M+ credit line.
CurveDAO needs to protect themselves here first, and Yield Basis should come second.
These requests aren't extremely time consuming and should benefit both parties to discuss.
My concerns were posted 10+ days ago to the discussion page, I haven't received any response.
It's worth noting, I will gladly vote in favor of a @yieldbasis credit line if the glaring risks and transparency issues are addressed.
(Discussion Page - gov.curve.finance/t/create-a-crv… )
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