The Weekly Yax #17: Gauges
The Weekly Yax is the easiest way to keep up with the yAxis Project.
Every Sunday, we highlight major news and developments, alongside key takeaways from the week’s episode of Ya Herd?
Major News & Developments
- August 9th yAxis extended its ImmuneFi Bug Bounty to cover v3 after v3 development was completed.
- August 13th marked the 17th episode of Ya Herd? and its podcast format.
Ya Herd? Week #17 Key Takeaways
This week’s episode was motivated by recent community questions regarding Gauges and how staking will change with the launch of v3. These questions prompted yAxis to utilize this week’s Ya Herd? as an opportunity to review Gauges functionality, other successful Gauges implementations, and what Gauges mean for yAxis and YAXIS holders.
Gauges are multi-faceted, providing utility for both stakers and vault users. When Gauges are launched, stakers will migrate their YAXIS from the current staking contract to the new Gauges, choose a lock time, and receive veYAXIS or “vote escrowed YAXIS.” The amount of veYAXIS you receive will be based upon the amount of YAXIS being locked up and the length of lock time. Selecting the maximum lock length, one year, will yield the most veYAXIS possible for your position size. This maximum lock length is designed to roughly align with the yAxis emission schedule. The amount of veYAXIS you receive per YAXIS decreases linearly if you choose a shorter lock time all the way down to the minimum lock time of one week. veYAXIS determines each staker’s voting power in allocating vault emissions, or “Gauge Relative Weight,” and also boosts YAXIS rewards.
As a v3 vault user, you will be met with cleaner deposit process (no need to convert to 3CRV for stablecoin deposits) and an updated front end. After depositing, you will receive an ERC-677 vault token, which you will stake in the liquidity gauge that aligns with the asset for which you just provided liquidity (i.e. ETH liquidity gauge) to receive YAXIS rewards. This process is a slight change from the current MVLT token and reward contract. In addition, vault users will be able stake and lock YAXIS and use their associated veYAXIS to vote to allocate YAXIS rewards (i.e. Gauge Relative Weight) to the places where they are providing liquidity. This functionality provides users with some control over the yield they earn. Furthermore, vault users can also use veYAXIS to boost YAXIS rewards on their vault positions.
The Gauges model is an innovation that Curve Finance contributed to the DeFi space and thus we can look to Curve for the longest Gauges track record. Since August 2020, veCRV has grown steadily from zero to over 43 percent of circulating CRV locked. This growth is immense, particularly when you consider Curve’s aggressive emission schedule (i.e. the denominator of the percentage is always growing rapidly) and the farming of CRV given Curve’s role as a DeFi base layer, which is a headwind yAxis wouldn’t have to overcome given its position at the top of the yield stack.
Thank you to Banteg for creating this Dune Analytics Dashboard.
This percentage share growth of veCRV, even in the face of CRV supply increase, has an effect of minimizing the negative impacts of that overall supply increase by locking and removing circulating supply from the market, while directing that increased supply longer-term aligned capital as the users receiving the most CRV rewards have committed to owning and locking CRV.
Seeing the success of Gauges at Curve, others such as Pickle Finance have also adopted this vote escrow model. Andre also recently put together a proposal for oSUSHI, a method for adapting the Gauges model for Sushi’s Onsen platform, as more and more DeFi platforms look to adapt this model to their own needs.
What do Gauges mean for yAxis and YAXIS holders?
- Added utility for YAXIS as a vault user can now generate “cash flow” from their YAXIS by boosting their yield on their vault position(s), driving inherent token value accrual.
- Increased scarcity for YAXIS as the locking component reduces the amount of supply actually circulating at a given time.
- Improved behavioral incentives by rewarding those who are willing to commit to yAxis and disincentivizing mercenary capital. Through this incentive structure, Gauges help maximize the utility and bootstrapping effect from yAxis’s emission phase, driving long-term value creation, network effect, and sticky capital — as discussed in Week 13.
yAxis Project Stats of the Week
- MetaVault TVL $4.94 million.
- YAXIS staking 59% APY (46% APR) and LP 37% APY (32% APR).
- Nearly 630 YAXIS bought back with MetaVault revenue this week for distribution in The Great Harvest.
Join Us: Bounties & Jobs
Coordinated by the yAxis Champions Programme, the yAxis Bounty Board lists requests for proposals (RFPs), where community members can respond to specific Project needs and receive compensation upon task completion. See the current opportunities below and check the Bounty Board frequently as more opportunities will be added over time, such as the recently added Convex Development Bounty, which has attracted some great interest from potential contributors.
If none of the current opportunities appeal to you, but you would still like to contribute, reach out to email@example.com. You have the opportunity to shape the next era of yAxis.
That concludes the seventeenth edition of The Weekly Yax. Thank you for reading and looking forward to many more!
Onward and upward, Herd!