YFV Update: Pool 0, Minting Keys, & Community Governance
Hello YFV community! We would like to update you on the following actions and decisions regarding two specific issues — the impending fund lockup of “Pool 0”, our initial staking pool, and how we will address the vETH/vUSD minting key oversight being discussed by the community. Additionally, we will propose transferring ownership to a multisig contract with signers from the YFV community in order to empower user-driven governance decisions going forward.
Pool 0 Incident
To those who were unaware, there was an incident in our initial deployment of the seed (stablecoin) pool, which we’ve titled “Pool 0” (contract address). We owe you a complete explanation of what happened and our decision-making process.
On our initial launch day of YFValue (Monday 17/8/2020 08:00:00 GMT+0) we made a human error by clicking on the wrong tx confirmation when trying to remove our control of the pool. For the more technically aware, the steps that needed to be taken were to set governance to “0x0” to revoke ownership. Unfortunately, we accidentally clicked the “revoke ownership tx” out of order, and the transaction settled so that we could not set governance anymore. The risk would be us calling the notifyRewards function to lock down the ability to withdraw funds (which obviously we would never do).
Realizing this error and in the spirit of true decentralization, we decided to relaunch the next day by opening another seed pool (Pool v2) while penalizing ourselves by burning the equivalent amount of tokens from our dev fund. The extra YFV generated by pool 0 for its epoch was 0.3% of 21M YFV, and having burned that amount we had considered the matter concluded.
However, clever members of the community noticed our mistake and took advantage of it by continuing to farm in pool 0 despite our warnings, despite our removal of the frontend UI. As there was no way we could stop this activity, we made the decision to burn the minter key. This key burn would cause tx failure at checkNextEpoch (08/24/2020 @ 7:52am (UTC), an event which we hoped would serve as a deterrent.
Despite our best efforts, nonetheless we are aware that there is a possibility that some miners in the pool may forget to remove their funds before this critical deadline. As a consequence, their staked capital would be lost forever. While we are not particularly sympathetic to this “selfish mining”, the discovery of vUSD and vETH minting keys have given us a more elegant solution to this issue. This will be discussed further in the next section.
Over the past 24 hours, various community members correctly identified a minting key oversight (tweet link) and exploit related to vUSD and vETH that would enable locking of funds after the completion of the current epoch.
Our dev team’s first impulse was to simply renounce ownership of these keys. Upon further consideration, we realized that there was a silver lining. The possession of these keys actually enables us to “rescue” any funds left in Pool 0 that would otherwise be irrevocably locked up after the conclusion of its epoch.
Given our interest in preserving the funds of our users who may have missed our repeated announcements to remove their funds from Pool 0, we have decided to hold onto those keys such that we will be able to return any user funds that are left in Pool 0 after it enters its locked state.
After the conclusion of that series of events and determining that all user funds have been withdrawn or rescued, we have decided to transfer ownership of these keys to a multisig wallet for flexibility in future governance decisions.
To make this happen, we have around 36 hours until the next epoch (periodFinish = 1598363903, or Tuesday, August 25, 2020 1:58:23 PM GMT+0) of the Seed Pool v2 to transfer the ownership of YFV that is currently under our control to a multisig address. We need at least 4 co-signers (minimum), and up to 10 co-signers for a 3/5 multisig or 7/11 multisig.
We will work with the YFV community to nominate and select trustworthy and impactful DeFi experts and power users who are invested and enthusiastic about the growth of YFV. It is our hope that, in lieu of a simple key burn, the delegation of governance to a multisig contract managed by members selected by the community will give YFV far more options and opportunities for growth. Given the birth of two new rebasing assets, vETH and vUSD, we are extremely optimistic regarding future use cases and applications of the foundation we’ve built here.
So far, the community has proposed the following candidates:
- Michael from Boxmining
- Vitalik Buterin from Ethereum
- Loi Luu CEO from Kyber Network
- Andre Conje from YFI
- Taiyang Zhang CEO from REN
- Fernando Martinelli CEO from Balancer Labs
- Brendan Eich CEO from BAT
- Sergey Nazarov CEO from Chainlink
- Reuben Yap COO from Zcoin
- Big supporters or team members from BAL, YFI, BAT, REN, KNC, BTC, ETH, LINK? We welcome suggestions.
While these are our proposed recommendations, naturally the decision ultimately lies with the community.
Finally, we would like to thank the YFV community for your interest and trust in this project. Furthermore, thank you for your understanding and patience as we do our best to unwind and deliver fair solutions to these development oversights. Overall, the YFV community remains strong, and we look forward to delivering additional products and exciting announcements in the days ahead.