Yam

THIS PROPOSAL IS ONLY ABOUT REMOVING REBASE MECHANISM AND TREASURY PURCHASE.

See “[Adapted] Add 3% Inflation (Yes/No)” for alternative funding method. LINK https://snapshot.page/#/yam/proposal/QmV3FekewNwceF1VgYJmWY34F4EnMtwqUaRVSpmVT6dZoU

If this proposal meets quorum and passes, it will nullify the results of:

1. “YIP: Replace Yam Rebase Mechanism” https://snapshot.page/#/yam/proposal/QmPyGf545swRtF7UZ1t5Yud6kbYp9y89dSbFkafkXxrmYx
2. “YIP: Replace Yam Rebase Mechanism” https://snapshot.page/#/yam/proposal/QmNR1SMZsZuA7f1EzGmWjSFgeanYVkDuEwCSR4ws2w1hQi

See Forum Discussion https://forum.yam.finance/t/rfc-replace-yam-rebase-mechanism/1058

=== In the Beginning ===

https://medium.com/yam-finance/yam-finance-d0ad577250c7

We’ve come a long way since the launch of Yam back on August 11th. As we move forward and learn from past choices, some fascinating dichotomies of programmable money and the people that govern them arise; the features of Yam are incompatible.

=== Motivation ===

Yam seeks price stability by changing the supply of Yams in your wallet without trying to adjust the value in your wallet, but that hasn’t worked very well. The price moves in the direction of the peg, but the problem comes when the community, who govern the protocol, seek price appreciation and not stability.

Token holders want appreciation of Yam:

How do these two things all fit together? Well, they don’t…

There needs to be a positive feedback loop between community governance, the YAM governance token, and value creation by Yam Treasury investments, and by all accounts the rebasing mechanism is holding us back.

We are currently developing multiple products in tandem including Umbrella, UMA-Degenerative, and YAM DAO Set (YDS). All of which have some component of revenue generation. We are also installing the machinery for our Yam Factory to hopefully create even more products. I would like the Yam community to focus on what we are building and not the rebasing function.

Here are the Pros of a rebasing asset:

It can be gamified (largely due to artificial price movements and supply changes) It’s an interesting experiment that could lead to unique use cases that non-rebasing assets cannot do. Stable-ish (in theory)

Here are the Cons of a rebasing asset: More complicated to understand and calculate profit/loss than a non-rebasing asset. Composability between other protocols like AMMs need to be whitelisted otherwise YAMs staked as a liquidity provider could be lost. Any centralized exchange needs to constantly update account balances according to the changes in supply. Stable-ish high gas fees for calling the rebase function an syncing whitelisted pools for the balance updates (high $100’s to low $1,000’s per month just in gas fees)

Composability is important for long term sustainability. We are already finding new collaborations with other DeFi protocols and we don’t plan on stopping there. Potentially some of these collaborations will be hindered by a rebasing asset.

== Specifications ==

Developer light to implement. The scaling factor would be fixed at a specified time and the rebase function deactivated by calling this function:

yam._setRebaser(0x0000000000000000000000000000000000000000)

Making it so no address can execute rebase