GitBook: [master] 8 pages modified

README.md

@@ -10,7 +10,7 @@ None of this is financial advice, just an educational tool.
 
 Do your own research, don't risk anything you can't live without, and don't trust anyone. **Never** give out your private key, seed phrase, mnemonic, or passwords.
 
-Since crypto is ever-evolving, this will never be able to cover absolutely everything. Notice something missing? You can contribute on GitHub!
+Since crypto is ever-evolving, this will never be able to cover absolutely everything. Notice something is missing? You can contribute on GitHub!
 
 Now that we've got that out of the way, welcome!
 

SUMMARY.md

@@ -16,5 +16,6 @@
   * [Crypto Backed](stable-coins/crypto-backed.md)
   * [Protocol Controlled Value](stable-coins/protocol-controlled-value.md)
   * [Seigniorage](stable-coins/seigniorage.md)
-* [DeFi Incentives](defi-incentives.md)
+* [DeFi Incentives](defi-incentives/README.md)
+  * [Yearn Finance](defi-incentives/yearn-finance.md)
 

defi-incentives/README.md

@@ -0,0 +1,25 @@
+# DeFi Incentives
+
+## Liquidity Mining, Transaction Mining, Yield Farming
+
+Kicked off by [Compound in June 2020](https://compound.finance/governance/proposals/7), distributing governance tokens to users in order to incentivize adoption has become a staple of DeFi.
+
+* Liquidity Mining: Rewards to Liquidity Providers on DEXs, lending platforms proportional to the amount provided
+* Transaction Mining: Rewards to users making trades, taking out loans, etc.
+* Yield Farming: Chasing the best reward systems to get the highest returns
+
+## Staking
+
+You may hear a project saying that you must "stake" a token in order to get a reward. What this means is that you actually send that token to be held by a contract, but you should be able to get your token back at will \(though it's possible they might have a time delay\). **Do not blindly send tokens to a contract you don't trust. Check for audits, read the code, Do Your Own Research \(DYOR\).** 
+
+Why do projects want you to stake?
+
+* It adds "friction" to the system of you taking out your money
+  * If it's easier to leave your money in, you're more likely to keep it there
+* Rewards are easier to calculate
+  * When only stakers are eligible for reward, developers \(or contracts\) only need to examing the staking contract in order to determine reward distribution
+
+
+
+
+

defi-incentives/yearn-finance.md

@@ -0,0 +1,18 @@
+---
+description: 'https://docs.yearn.finance/'
+---
+
+# Yearn Finance
+
+## Yield Farming on Steroids
+
+Yearn allows users to easily get the best stable returns on their assets by pooling loans together and having a community constantly looking for the best rates to generate yield farming returns. 
+
+Yearn is governed by a "[worthless](https://www.coingecko.com/en/coins/yearn-finance)" token called YFI.
+
+> In further efforts to give up this control \(mostly because we are lazy and don’t want to do it\), we have released YFI, a completely valueless 0 supply token. We re-iterate, it has 0 financial value. There is no pre-mine, there is no sale, no you cannot buy it, no, it won’t be on uniswap, no, there won’t be an auction. We don’t have any of it.
+>
+> [https://medium.com/iearn/yfi-df84573db81](https://medium.com/iearn/yfi-df84573db81)
+
+
+

stable-coins/README.md

@@ -18,8 +18,6 @@ There are a number of ways that stablecoins work \(or try to work\). They each h
 
 * Fiat backed
 * Crypto backed
-* Seigniorage
 * Protocol Controlled Value
-
-
+* Seigniorage
 

stable-coins/protocol-controlled-value.md

@@ -1,20 +1,34 @@
 # Protocol Controlled Value
 
-## Buy stablecoin, deploy liquidity
+## Self-stabilizing, no collateral IOU
 
-While most protocols offer incentives to keep assets in their ecosystem, Protocol Controlled Value doesn't give you much of a choice. Once you buy the stablecoin, the only place you can exchange back is on secondary market exchanges \(DEXs and CEXs\). The protocols have systems in place eliminate surplus tokens \(much like how governments do\) to push the stablecoin back to its price peg.
+While most protocols offer rewards to keep your assets in their ecosystem, Protocol Controlled Value doesn't let you take it back -- directly, at least. When you buy the stablecoin from the protocol, the protocol deploys that asset you just gave it \(along with more of the stablecoin\) as liquidity in a secondary market \(DEX\).
+
+This means that when someone wants to buy more of the stablecoin, they can either go to the secondary market, or to the protocol itself, whichever is cheaper.
+
+If the price gets too high in the secondary market \(supply deficit\), reasonable people will buy the token direct from the protocol, which increases supply. If the stablecoin price gets too low in the secondary market \(supply surplus\), the protocol itself can correct this using a technique like:
+
+1. Remove its own liquidity from the pool
+2. Buy the surplus stablecoin from the remaining assets in the pool
+3. Redeploy its liquidity in equal parts
+4. Destroy \("burn"\) the excess tokens it just bought
+
+This may sound like a bad trade for the protocol. It is! But it provides price stability. But because the protocol _owns_ the value that backs it, it's also able to generate more value so it can afford to provide this service. 
+
+When you give the protocol assets to create the stablecoin, it can actually do more than just provide liquidity to the secondary market. It also can invest parts of it to generate income. How much and where to invest it is up to the governance community.
 
 ## Pros
 
-* Don't have to worry about fleeing capital if better rewards pop up \("Mercenary Capital"\)
+* Don't have to worry about fleeing collateral if better rewards pop up \("Mercenary Capital"\)
 * Decentralized
+* Protocol can build value of controlled assets
+* Protocol stabilizes the price itself 
 
 ## Cons
 
 * Still needs to be proven in the market
-* Crypto-asset backing locked in liquidity pool forever
 
 ## Example
 
-* FEI \(has not been deployed at time of writing\) \([more info](https://medium.com/fei-protocol/introducing-fei-protocol-2db79bd7a82b)\)
+* FEI \(has not been deployed at time of writing\) \([read the whitepaper!](https://fei.money/static/media/whitepaper.7d5e2986.pdf)\)
 

stable-coins/seigniorage.md

@@ -2,7 +2,7 @@
 
 ## Print and Burn
 
-These algorithmic stablecoins have no backing and are based on game theory with financial incentives. 
+These algorithmic stablecoins have no collateral backing and are based on game theory with financial incentives. 
 
 ## Pros
 
@@ -11,8 +11,8 @@ These algorithmic stablecoins have no backing and are based on game theory with
 
 ## Cons
 
-* They don't seem to work ¯\\_\(ツ\)\_/¯
 * Early adopters get filthy rich
+* They don't seem to work ¯\\_\(ツ\)\_/¯
 * High risk money games
 * Large players \("whales"\) can greatly influence the market valuation