There is still good news out there. You just have to search for it. Today the first ever transaction for voted-escrow – veYFI on YFI has been recorded. This could mean a price increase and an overall added value of the DeFi earner Yearn – YFI
What is the vote-escrow mechanism for veYFI?
Introduced by Curve, the voted-escrow – ve has the following features;
- Locking is similar to the ve-style program of Curve where users can lock YFI into veYFI for a duration between min 1 year, max 4 years.
- Depending on the locking duration, users get different weights linearly. Where a longer locking duration gives a greater share of voting power and share of YFI rewards.
- Voted-escrow tokens are locked and non-transferable. This can be bypassed via wrapped derivatives.
- Weights decay as the remaining lock duration decreases, and can be extended up to the max lock duration.
- Replaces xYFI, where a user must have a veYFI lock in order to continue to earn rewards. No lock leads to no rewards. Maximum lock, continuously renewed, maximizes rewards.
- It’s possible to exit the lock early, in exchange for paying a penalty that gets allocated to the other veYFI holders.
Death of permabear YFI shorter SBF
Now that FTX has gone to heaven, the most popular place where you could short YFI, is gone. Could this be good for YFI’s price action? We’ll take a look at YFI’s reaction on the proposal of the voted escrow function.
When the vote was passed by Yearn governance YFI’s price went from 15k to 45k in less than a week. Later in 2021 when rumors about the implementation of veYFI circulated YFI’s price was pumped from 6k to 15k. Now, first traces of the official upgrade have been shown. Ready to lift off?