Earlier this week, the Yearn Finance community voted in favor of the buyback proposal for YFI tokens. The buyback proposal would allow the community to build the needed infrastructure to help it move forward.
Yearn Finance approves buyback proposal
The Yearn Finance community is in support of the buyback proposal that would see them repurchase YFI tokens and use them to build crucial components on the network. The move is expected to benefit the Yearn community as a whole.
According to the post, Yearn Finance stated that they intend to “Use YFI staking rewards to buy back YFI on the open market. Use bought back YFI for contributor rewards and other Yearn initiatives. Retire the YFI governance vault as it no longer has a use, opening up for it to be replaced in the future with a regular vault. Make it possible to participate in Governance even if one’s YFI is being used elsewhere.”
The authors added that the move would benefit the community by simplifying Treasury design and operation. Simplifying YFI token mechanics would align interests across Yearn stakeholders. As a consequence, this would build up a treasury of YFI that could be used in Governance for various activities.
The benefit also spreads to the YFI token holders. They will no longer need to stake YFI to enjoy rewards. Potentially, this will make gains more tax-efficient. Capital appreciation through buybacks could be taxed less than dividend income through staking rewards. Furthermore, the holders can participate in YFI Governance even while the YFI tokens are utilized elsewhere.
YFI rallies following approval
The YFI token rallied following the approval of the buyback proposal. It crossed the $50,000 mark for the first time this week since January. The token has stayed above the $51k mark over the past two days and is up by 9% against the US Dollar in the last 24 hours.