Yearn Finance’s governance forum is considering YIP-86, a proposal for the main Yearn DAO to extend a $1.13 million crvUSD loan to its sub-DAO Resupply to cover remaining reUSD bad debt from a roughly $10 million exploit affecting Resupply’s markets. The intent is to immediately clear the residual bad debt on reUSD, restore full solvency and confidence in the stablecoin, and then have the loan repaid to Yearn’s treasury over time using Resupply’s protocol revenues.
Resupply has already reduced much of the original $10 million bad debt, but about $1.13 million of reUSD bad debt remains, which is currently being worked down via revenue from Yearn and Convex “permastaker” positions. To accelerate recovery, the proposal has Yearn front this future revenue: Yearn would lend 1.13M crvUSD at 6% APR, with repayment targeted within one year, denominated entirely in crvUSD. During the loan period, Yearn agrees to forgo its own staking (permastaker) revenue, redirecting 100% of those flows—as well as Convex’s permastaker revenue share—toward automated weekly loan repayments tracked by smart contracts and returned to Yearn’s treasury as yvcrvUSD-2.
The proposal notes that Resupply has generated about $140,000 in stablecoin revenue via Yearn’s permastaker since launching in March (around $46,000 per month), and that Yearn currently owns around 11.58% of the Resupply DAO through staked RSUP. Combined Yearn and Convex permastaker revenue represents 34.6% of Resupply’s total protocol revenue, historically about $31,446 per week (~$1.64M/year) before the hack, which governance believes is sufficient to meet the one-year repayment target. If after four months repayments are behind schedule, the team commits to supporting an additional protocol-level revenue split to accelerate paydown, and Resupply will provide monthly repayment updates to Yearn DAO. The measure matters because it formalizes how Yearn uses its treasury and revenue share to stabilize a sub-DAO after an exploit, while attempting to protect Yearn’s balance sheet via interest-bearing, revenue-backed terms rather than a one-way bailout.
✨ AI-generated background, compiled from web sources — not editorial content.
