VIP 3: Adjustment of pool distribution rate voting mechanism

SUMMARY:

Based on community feedback and tentative proposals from both Discord and Telegram, it is evident that there is a need to make adjustments to the voting mechanism for the epoch distribution rate of current pools. Currently, the voting mechanism advantages YFV pool-specific miners over holders. To empower YFV holders participating in governance in determining pool emission rates, we are hereby introducing an empowerment factor empFactor.

MOTIVATION:

As each pool is part of the YFV ecosystem, their distribution rates have a significant impact on the future of YFV and ecosystem products. At the moment, farmers are often incentivized to vote for max emissions, which may not be in the community’s best interests over the long term.

As such, the current governance structure should better reflect the voices of YFV holders and assign greater voting power.

MECHANICS:

In the current model, farmers of each pool have 100% voting power in determining emission rate for that pool.

We propose an empowerment factor to adjust the voting power of pool-specific farmers and transfer voting power to YFV stakers. This change would be applied at the end of each pool’s current epoch.

Example (KNC/YFV Pool):

• empowerment factor ‘empFactor_KNC’ will be applied to the voting power of all YFV holders when voting for the KNC pool
• Voting power of all KNC farmers will be applied according to the formula (1 — empFactor_KNC)
• Result: Assuming the empowerment factor is determined to be 40%, when voting upon emission rate for the next epoch, the voting power would be distributed as follows: 40% YFV stakers, 60% KNC pool farmers,.

The community will vote on the addition of an empowerment factor as well as its magnitude from a minimum of 0% to a maximum of 80%. This selection indicates % of voting power transferred to YFV stakers.

Choosing the maximum of 80% indicates that farmers’ voting power regarding emission rates will be reduced to 20%, with YFV stakers having 80%.

Choosing the minimum of 0% effectively means no change; farmers will maintain full 100% voting power to affect the emission rate of each pool.

VIP 3 Voting will start from Tuesday, Sep 02 4:00:00 GMT+0 and the new voting weights will be applied for every subsequent epoch until the distribution of YFV ends.