The way Yearn Finance and Pickle Finance look today versus in 6 months will likely be worlds apart. These words were noted by Delphi Digital Analyst, Ashwath Balakrishnan that the DeFi protocols’ “ferment co-operation dill” is just beginning, and the final form of this partnership is yet to be set in stone.
The analyst referred to the first-ever merger and acquisition [of sorts] agreement in the decentralized finance [DeFi] world. The developers of both protocols had reportedly devised a structure to enable the projects to work together in symbiosis in order to reduce duplicate work, increase specialization, and to leverage shared expertise.
Yearn Finance-Pickle Finance Partnership
As Yearn Finance came to Pickle’s aid, lots of opinions and misconceptions started floating around the recent agreement between the two DeFi protocols. Noting the same, Balakrishnan tried to clear the air.
The Pickle’s jars, which were previously the yield farming vaults, will rebrand to yVaults, and Pickle would be entitled to half of the performance fee from vaults they created the strategy for. Moreover, all strategy creators will be rewarded with half of the performance fees in yEarn v2.
In addition, PICKLE investors, who vote lock their tokens for the new vote locking token called, DILL will have a claim on strategy fees from what were previous pJars, a 20% performance fee on yVault tokens in the gauge, as well as 0.5% withdrawal fee.
Hence, the analyst claimed that this result is better value capture for the PICKLE token since rather than charging fees on a few pJar strategies, the investors of the token who vote lock into DILL will be able to pull value from Yearn Finance’s native vaults as well.
The first step of this “co-operation” would be to merge Pickle Jars and Yearn’s v2 Vaults and merge both protocol’s total value locked, or TVLT. Hence, the benefits are obvious for Yearn Finance. To this, Balakrishnan stated,
“With Pickle rewards, TVL instantaneously rises resulting in more fees and thus more value captured by $YFI. With 0 $YFI inflation, yEarn can now boost vault returns through yield farming rewards in $PICKLE.”
He went on to assert that for Yearn Finance’s native token, YFI, this is a short and long-term benefit with certain improvements to value capture but with respect to PICKLE, the short term is much, much better than it was as a standalone product. Considering the long term aspect, it is a bit more uncertain in terms of value capture and the token’s long term role in Yearn Finance.
Yearn & Cream V2 Merger
In yet another development, Yearn Founder Andre Cronje revealed that the developers of both Yearn and Cream have teamed up to launch Cream v2 which will aim at core lending and leverage products. Cream v2 essentially allows earning yield with leverage and is a launchpad for future collaborative lending products of the two DeFi platforms.