Overview

veYFI incorporates YIP-56: Buyback and Build funds into YFI tokenomics. Users can lock YFI tokens and receive veYFI, which allows them to boost vault rewards and vote on where bought-back YFI will be sent.

Contract Address: 0x90c1f9220d90d3966fbee24045edd73e1d588ad5

Specification

Governance Forum Thread: https://gov.yearn.fi/t/yip-65-evolving-yfi-tokenomics

veYFI Overview

• Locking is similar to the ve-style program of Curve.
• YFI can be locked into veYFI, which is non-transferable.
• Lock duration can be decided on deposit: from 1 week to 4 years.
  • You can actually lock up to 10 years, but anything above 4 years doesn’t give you more veYFI. This way you don't have to relock every week. If you set it to longer than 4 years, you can always reset it to 4 years so it starts decaying.
• A user must have a veYFI lock earn boosted rewards. No lock leads to no boosted rewards. A Maximum lock, continuously renewed, maximizes rewards.
  • Just like with Curve, even without a veYFI lock, you can still deposit into a vault and stake the vault token into a gauge which will give you the base boost. With the minimum boost, you get to keep 10% of the dYFI you farm. The other 90% goes to veYFI lockers.
• It’s possible to exit the lock early, in exchange for paying a penalty that gets allocated to the other veYFI holders.
• The penalty is up to 75% locked amount and decays over time:
  • The total penalty is the minimum percentage between 75% locked amount and (time remaining / 4 years)
  • So if your lock is over 3 years you will pay 75%.
  • If your lock is 2 years you will pay 2/4 = 50%
  • Penalty Formula: min(75%, lock_duration_left / 4 years * 100%)
• veYFI holders are eligible to receive a share of the early exit penalties.
• veYFI holders are eligible to receive a share of gauge dYFI rewards from unused boosts.
• Now that veYFI has been implemented, only veYFI is accepted voting power in Yearn Governance.

dYFI as Gauges Reward

• dYFI is an ERC-20 token.

• Gauges emit dYFI that users can either sell for ETH or convert to YFI at a cost.

• Gives its bearer the right to redeem an equivalent amount of YFI in exchange for ETH.

• dYFI is burned upon redemption.

• The circulating supply of dYFI must not exceed the amount of YFI available to be redeemed as part of the tokenomics program.

• The amount of ETH required for redemption is at a discount to the current spot price of YFI/ETH.

• Discount calculation is a function of the veYFI and YFI supply with the following formula:

  • discount = c / (1 + a * e^k(s * x − 1)), where:
    • c = 1
    • a = 10
    • k = 4.7
    • s = configurable scaling factor
    • x = veYFI_supply / YFI_supply

  

• ETH received from dYFI redemption is redirected to automated YFI buybacks handled by an immutable smart contract that runs Dutch auctions.

Vault Gauges + Voting

• Vault gauges allow vault depositors to stake their vault tokens and earn dYFI rewards according to their veYFI weight.
• Weights decay as the remaining lock duration decreases and can be extended up to the max lock duration.
• Increased locking duration is rewarded with increased weight, so locking for 4 years gives 100% weight, locking for 2 years 50% weight, etc.
• dYFI is allocated to gauges based on bi-monthly governance votes. Each gauge can get a different amount dYFI to emit.
• Based on their veYFI lock, users can boost their gauge rewards by up to 10x proportional to the number of vault tokens deposited, when they claim YFI rewards from gauges. The greater the amount of veYFI, the more vault deposits can be boosted for the user.
• The boost mechanism will calculate your earning weight by taking the smaller amount of two values, provided in the formula below:
  • Gauge boost formula: min(AmountDeposited, (AmountDeposited /10) + (TotalDepositedInTheGauge * VeYFIBalance / VeYFITotalSupply * 0.9))
• A claim with boost under 100% will send the leftover tokens to veYFI holders.

Vault Gauges Table

Index	Symbol	Name	Address
0	yG-yvCurve-YFIETH	yGauge Curve YFI-ETH Pool yVault	0x7Fd8Af959B54A677a1D8F92265Bd0714274C56a3
1	yG-yvCurve-dYFIETH-f-f	yGauge Curve dYFIETH-f Factory yVault	0x28da6dE3e804bDdF0aD237CFA6048f2930D0b4Dc
2	yG-lp-yCRVv2	yGauge LP Yearn CRV Vault v2	0x107717C98C8125A94D3d2Cc82b86a1b705f3A27C
3	yG-yvCurve-yETH-f	yGauge Curve yETH Factory yVault	0x81d93531720d86f0491DeE7D03f30b3b5aC24e59
4	yG-lp-yPRISMA	yGauge LP Yearn PRISMA Vault	0x6130E6cD924a40b24703407F246966D7435D4998
5	yG-yvWETH-1	yGauge WETH-1 yVault	0x5943F7090282Eb66575662EADf7C60a717a7cE4D
6	yG-yvUSDC-1	yGauge USDC-1 yVault	0x622fA41799406B120f9a40dA843D358b7b2CFEE3
7	yG-yvDAI-1	yGauge DAI-1 yVault	0x128e72DfD8b00cbF9d12cB75E846AC87B83DdFc9
8	yG-yvCurve-sdYFIv2-f	yGauge Curve sdYFIv2 Factory yVault	0xB61F8fff8Dd8C438E0d61C07b5536cE3d728f660
9	yG-yvCurve-upYFI-f	yGauge Curve upYFI Factory yVault	0xf719B2d3925CC445D2Bb67FA12963265E224Fa11

The above Gauges can be verified using the YFI Gauge Registry contract and querying the gauges() function with the index listed above.

veYFI Reward Pool

• Users who lock YFI for veYFI can claim accumulated fees from the veYFI reward pool. The reward pool gets fees two ways: YFI from the veYFI early exit fee and the non-distributed gauge rewards due to a lack of full boost.

Addresses

Description	Address
Gauge registry	0x1D0fdCb628b2f8c0e22354d45B3B2D4cE9936F8B
Gauge controller	0x46b38522422D597dDbAA2D6E98D6C9b397028d5B
dYFI	0x41252e8691e964f7de35156b68493bab6797a275
dYFI Redemption	0x7dC3A74F0684fc026f9163C6D5c3C99fda2cf60a
YFI Reward Pool	0xb287a1964AEE422911c7b8409f5E5A273c1412fA
dYFI Reward Pool	0x2391Fc8f5E417526338F5aa3968b1851C16D894E