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Breaking: Maker's new proposal: Evaluating adding YFI as collateral

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Breaking: Maker

Maker's Oracle team member Niklas Kunkel launched a new proposal MIP10c3-SP10 today, aiming to assess the inclusion of yearn's governance token YFI as collateral asset in Maker's lending system.

Maker: Adding YFI as Collateral is Beneficial

Backend lead at MakerDAO Niklas Kunkel stated in the proposal that the main idea behind this proposal is to add an oracle that provides YFIUSD data, as well as to include YFI as an option for collateral.

According to the proposal, the primary sources for YFIUSD reference data are: Binance, Coinbase, FTX, Huobi, and Uniswap.

Niklas Kunkel mentioned that adding YFI as collateral would be beneficial for the collaboration between the Maker protocol and Yearn Finance. He believes that similar to MKR, when YFI gains enough liquidity in lending protocols like Aave or Compound, YFI could be vulnerable to governance attacks.

He further explained the benefits for YFI, as Maker will no longer lend out the collateral deposited by users. This means YFI holders can keep their YFI stake without compromising the governance security of YFI. Additionally, lending DAI with YFI on Maker and then buying YFI would be safer due to their Oracle Security Module having a one-hour liquidation delay compared to Compound and Aave.

He also emphasized that YFI has become an essential part of the current DeFi ecosystem. Being listed on major exchanges has helped in establishing a more robust oracle, although the weighting of data sources is still up for discussion.

Upon the announcement, the official yearn Twitter account also retweeted the proposal.