Censorship is the talk of DeFi this morning as automated asset management protocol Balancer blacklisted YFII, the fork of yEarn’s governance token, YFI. The confusingly named fork was announced earlier this week.
YFII has been the recipient of vast community contention, with critics citing unaudited smart contracts, centralized control and safety risks as reasons why yield farmers should avoid the project.
But YFII continues to move forward, recently burning its owner key to mitigate the risk of infinite inflation. While the project appeared to be making strides towards safety, key DeFi players Balancer and MetaMask saw otherwise.
1) Some thoughts on @FinanceYfii and @iearnfinance . There are very different mindsets between the east and the west, looking how this event unfolded from two-sided is quite interesting. First of all, salute to @AndreCronjeTech for creating the @iearnfinance protocol.
This morning, Balancer blacklisted $20M worth of YFII pools on their UI in an attempt to protect its users. The move spurred some backlash as community members said Balancer should have used its BAL-based governance system to make the decision, while others took the opposite side saying Balancer has the right to decide what projects are listed in its interface.
YFII responded by forking Balancer, only to be met with a blatant scam warning by MetaMask.
So @BalancerLabs just blacklisted a pool and removed it from their frontend… a pool with **$20 million** of funds in it.
They did this without any community governance at all. pic.twitter.com/bKq9Qt8rRv
— ⟠ toast.eth (@intocryptoast) July 29, 2020
YFII’s forked Balancer pool is still live, and Balancer has since relisted the original pool on their front end to allow LPs to remove liquidity.
If nothing else, this case of “is it a scam is it not” won’t be the last one in DeFi, and raises questions about the perceived permissionless nature of key protocols and whether everything should be decentralized.
—By Cooper Turley
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