Yearn creator proposes burning minting function to permanently limit YFI token supply

Yearn.finance's "on-chain governance" will be launched in the next two weeks. Meanwhile, the creator, Andre Cronje, has proposed to burn the minting function of the governance token YFI and limit the total supply of YFI to 30,000 as the first governance proposal after the on-chain governance deployment.

Deploying On-Chain Governance

Yearn.finance creator Andre Cronje released a tweet stating that "On-chain governance" will be launched within the next two weeks, with the specific timing depending on the code audit situation. In the tweet, "On-chain governance" refers not to the "voting rights" of proposals, but to the "execution rights" of proposals. According to Andre Cronje:

"Once on-chain governance is deployed, multisig will transfer all system permissions to the governance system."

https://twitter.com/AndreCronjeTech/status/1304727143650340865

In other words, proposals that are approved in the future will no longer need to be activated through multisig by contract managers. When the proposal vote meets the threshold, it will be deployed directly. Skipping the intermediaries not only decentralizes protocol governance but also avoids potential threats from regulators in the future.

Proposal to Limit YFI Total Supply

In addition to sharing the development progress of "On-chain governance" in the tweet, Andre Cronje also announced that he will release the first governance proposal for the upcoming on-chain governance. Andre Cronje stated:

"As the first official on-chain enforced governance vote, I propose to permanently burn the minting function of YFI, thereby permanently limiting the total supply cap of YFI."

Once this proposal is approved, the total supply of YFI tokens will be limited to 30,000, and no additional tokens can be minted.

From a token economics perspective, this will completely eliminate the possibility of token inflation and maintain its scarcity. From the perspective of protocol security, Yearn.finance is transitioning to on-chain governance. If the minting function of the token continues to exist, it will inevitably become a vulnerability for protocol security. Therefore, limiting the YFI total supply can effectively avoid potential risks of protocol governance system attacks.

Based on the current community voting results, it appears that the yearn.finance community has reached a consensus. 99.97% of people (staking 774 YFI) voted in support of Andre Cronje's proposal.