1/x Thread on $YFI moat and risks of forks overtaking it:

2/x A common critique of YFI is that it is unsustainable because anyone can just fork it and copy everything they do.

3/x Let's start with comparison on a relative basis with other defi tokens. IMO, YFI is at comparatively low risk of losing out to successful forks.

4/x One big reason is that there is already a vibrant YFI community that is very satisfied with what's going on. YFI has already moved past its inflation yield farming stage and into the transactional (user pays YFI holders for services) stage, with great success.

5/x IMO, a project is at most risk of being successfully forked precisely at the moment they move from net paying their users in inflation to net extracting value from their users. Many will (quite reasonably) choose to back the fork at that time.

6/x Forks will turn back the clock and return to the glory days of getting paid in equity and not paying rent. (At least as long as future bagholders are willing to buy these tokens).

7/x Another likely reason why many projects will be successfully forked is that their initial distribution upsets the community (large private sales, founder/team distributions, etc.) and there is wide support for a fork that is more fairly distributed. Not likely for YFI!

8/x So in terms of relative risk, YFI doesn't seem especiallly at risk. But what about absolute risk? Yearn as I see is fundamentally a play on defi composability and economics of scale regarding gas. It's also a play based on a strong community and devs.

9/x Composability is a huge barrier to successfully forking yearn. There are a lot of moving parts and a lot of integrations that need to replicated. For example, many of the extant YFI forks are still using yCRV, which only benefits yearn!

10/x I expect in the future that yearn will likely get special treatment by a lot of the projects they integrate with. We already see special treatment coming from MKR, CRV, NXM, SRM, and others in the works. This will be challenging to replicate as a new fork.

11/x As the product offerings grow, the synergies will also. yearn products that do have network effects (such as having the largest curve stablecoin pool which therefore gets the most fees) will benefit the products that have less of a network effect.

12/x Economies of scale also apply when it comes to gas usage. It may not be apparent at the current number of strategies, but the more granularized strategies become, the more being the biggest fund will pay off for its users.

13/x Finally, there is the community and devs. The YFI community is one of the most vibrant in crypto and is likely to accelerate its growth over time. A ton of dev talent (like the one of a kind Andre) is going into these products!

14/x In the past, fork projects have often suffered from subpar code and often been high security risks. This is doubly so for a governance focused project. YFI holders have $1B reasons to treat you fairly. YF_____ holders may have significantly less.

15/x All of these challenges and the bull argument for forks is basically that they will charge slightly less rent? I think 0.5% withdrawal fees are not extremely high in an ecosystem that regularly has 0.3%+ fees on trades.

16/x None of this is to say that there won't be successful forks of YFI (shoutout to @DfiMoney) or that there aren't other very serious risks inherent to YFI. But I think the threats are far overblown.