Yearn and Pickle announced they have merged.
As far I’m aware this merger is another first for DeFi, with Yearn continuing to demonstrate strong leadership in this space.
I’ve seen a few terms thrown around including merger and acquisition, but from what I can see what’s happening could best be described as a close collaboration.
So what exactly is happening, and what does it mean for the future of Pickle?
If you’re not up to date, Pickle was recently exploited for $20m with an attacker completely draining a newly launched jar. You can read my summary of the Evil Jar exploit here.
Since then Pickle have been working closely with a group of white hat hackers, including @Samczsun and core Yearn devs.
Banteg has been frequently present in the Pickle discord, updating the community and providing key insight. We’ve known that Yearn have seen Pickle as a little brother for a while, but with today’s announcement the two now really are family.
The Dill
Here’s what we know:
Pickle Jars will become Yearn V2 vaults and Pickle will introduce reward Gauges, following a similar design to Curve.
Two new tokens will be introduced.
DILL will be distributed to governance participants who lock their Pickle, used to provide Yearn vault depositors up to 2.5x their rewards.
CORNICHON will track losses from the Evil Jar exploit, and in the future DILL holders will decide how best to help those affected.
From the looks of things the collab is a win-win situation.
Yearn gains Pickle devs as strategists who will earn 10% performance fees (skilled devs in this sector are extremely hard to come by), additional boosts to vaults, and an inflationary asset for future growth.
Pickle will benefit from the Yearn ecosystem’s established network, development and security expertise, and will be able to help those affected by the $20m exploit. (It was initially announced that it would be impossible to issue IOUs, as that amount of debt would have crippled this fledgling protocol).
DILL (and therefore PICKLE) looks like it will have a strong value proposition, with holders receiving a portion of protocol fees. DILL will also grant users boosted PICKLE rewards when participating in the Jars.
If all goes well, this could drive demand for the PICKLE token while decreasing supply through the locking mechanism.
No Vote?
The response from both the Pickle and Yearn communities has been nothing short of ecstatic.
However the wider ecosystem has made criticism that neither Pickle nor Yearn communities were given any say in this merger through a vote.
Yearn’s @tracheopteryx put out a detailed analysis explaining the reason for no $YFI vote. While I do agree with the argument, $YFI holders should have had the opportunity to debate this in my opinion, especially rewards boosting.
Criticism of Pickle may have more weight. The announcement completely took us by surprise.
But what the critics don’t understand is that Pickle is in its infancy. While many in the community have high aspirations of becoming an established DAO, the reality is that the project just isn’t there yet.
Whether we like it or not core developers do have all the power. In this instance the devs were put in an impossible position, and the merger with Yearn was a lifeline to save their project and protect their community.
I can totally empathise with their decision.
Having said that I do feel there should have been a vote, and my impression from the community’s response is that the Pickle holders would certainly have voted for this path.
Conclusion
These developments show just how early we are and where power really lies when the heat gets turned up, but that’s OK.
I started this blog because I’m optimistic on the future of decentralised governance, and while it’s going to be a long and difficult journey I believe it’s a path worth following. Naivety will not help us build the future world we want to see.
I remain a committed Pickle community member and continue to have faith in the developers. It’s a really positive community, and I’m looking forward to the project building a close connection with Yearn as we move forwards together.
Come and get involved.