Yearn Finance, the decentralized finance protocol, has announced a partnership with Pickle Finance to bolster yield farming incentives, and compensate victims of the recent Pickle exploit that resulted in the loss of almost $20 million in Dai.
It has been reported that Yearn founder Andre Cronje that the move is designed to reduce duplicate work, increase specialization, and leverage shared expertise.
However, Pickle Finance vaults, or “Pickle Jars,” are cloned versions of Yearn’s v1 yVaults, so the code is similar.
The report said that Pickle Finance incentivizes farmers to sell stablecoins that are trading above their peg and buy ones that are below it, to keep them closely aligned with the dollar upon which they’re based.
Cronje said that the first step would be to merge Pickle Jars and Yearn’s v2 Vaults and merge both protocol’s total value locked (TVL). He stated that further integration is planned.
1/ We are pleased to announce that Yearn has formed a symbiotic relationship with @picklefinance. You can read more information in the Medium & governance posts below. https://t.co/xR8HYp4V58https://t.co/WMG6l2GLdw — yearn.finance (@iearnfinance) November 24, 2020
The aim is to bolster returns for yield farmers with Pickle strategies earning increased performance fees under the new Yearn fee structure.
Yearn Finance, which recently formalized an operations budget, plans to onboard Pickle developers and strategy creators to design new strategies and fee structures for the new vaults.
Great news for victims of the Pickle heist, there may be a payout in your future!@picklefinance and @iearnfinance have partnered up to compensate Pickle farmers who lost over $20 million.https://t.co/tMfSCDiRBC — Cointelegraph (@Cointelegraph) November 25, 2020
It has been analyzed that Pickle will introduce reward gauges, with tokens distributed to those who stake Yearn vault tokens, as these tokens can now be time-locked in escrow and will be called DILL, which can also be used to participate in Pickle governance and boost rewards received from Yearn Vault gauges.
Likewise, some in the community questioned whether there should have been a governance vote on the decision, but Yearn team member “Tracheopteryx” explained this would not be necessary.
Some confusion out there about the @iearnfinance & @picklefinance partnership we announced today. Q: Should $YFI holders have voted on this? A: Nope, nothing to vote on I'll go through the announcement point by point to clarify 👇https://t.co/eau7EfAFvh — tracheopteryx.eth (@tracheopteryx) November 24, 2020
Cronje stated that creating new Yearn Vaults, such as the newly merged Pickle Jars, are completely permissionless, so no voting is required.
Additionally, the new gauges emit Pickle tokens, not Yearn’s, and rewards are in DILL, not YFI.
Thus, Pickle Finance was recently hacked in a Dai vault flash loan exploit which resulted in the loss of almost $20 million.