One of the key perks we discussed in RGP-9 [1] for RBN lockers (veRBN) is a pro-rata share of Ribbon’s protocol revenue. Two questions remain unanswered:
What asset should the protocol revenue be distributed in (i.e. RBN, USDC, ETH, BTC)
What % of the 2% management and 10% performance fees should be distributed to the RBN lockers
We will address Question 1 in this proposal, and address Question 2 in a subsequent proposal shortly thereafter.
Proposal
After internal discussion and listening to community feedback from RGP-9 [1], we propose to convert and distribute USDC to RBN lockers. This means we would sell all ETH, BTC, and AAVE protocol revenue and convert it to USDC on the market.
Pros
Curve distributes 3CRV which is a stablecoin [2] (the LP token for the Curve DAI + USDC + USDT pool) and so far has ~1B locked in their own voting escrow [3]. While we cannot attribute this entirely to the fact that fees are distributed in a stablecoin, it is clearly attractive and working well.
Cash flow APY is more predictable as the asset is not speculative.
Cons
No RBN buy pressure. Distributing RBN means introducing buy pressure on the token
BTC / ETH exposes you to upside in the market. USDC does not
Given the Pros and Cons, it seems like USDC is the best choice.
We also recognize that some options like Yearn’s yvUSDC [4] or Ribbon’s ryvUSDC-P-ETH-THETA [5] / rETH-THETA [6] ribbon vault tokens may be of interest. They increase the yield / are hybrid options. We will include those in the choices as well.
As promised, protocol revenue allocation to RBN lockers will be retroactively distributed to RBN lockers, snapshotted at block 14294931 (Feb-28-2022 01:32:48 PM +UTC) when the first user locked. This also means that we will distribute protocol revenue that was earned starting from the snapshot.
Voting
Each voter will be able to vote for three options weighted equally. The vote will have six choices:
I think there’s a nice simplicity in having a single asset - locking RBN tokens yields RBN rewards. Users who want to start compounding their returns can lock the RBN rewards they received ontop of their prior locked RBN position, without the need to swap.
I think to make the protocol competitive, I would recommend 50% of the management fee and performance fees to be distributed to RBN lockers.
I still think RBN is preferable to USDC. Curve is a stablecoin platform, so it would make sense to have a stablecoin as a reward. We also have to consider that not all users are in the United States or want a token that is tied to the US Dollar.
RBN profit sharing is more like Sushi, where users who stake their sushi tokens (xSUSHI) earn a percentage of the protocol fees, which are converted to sushi and distributed. it makes it very easy for users to compound their returns.
Are you sure this a serious opinion?
50% management fee?
I do support " 1. $ryvUSDC-P-ETH-THETA". Buyback is not the most efficient way to use fund, considering the difference of Maker & Curve. BTW, I suppose maker need change their tokenomics.
Honestly, I am on the fence but I tend to think that providing a stable asset for yield like USDC is an attractive option plus you could think of no RBN buy pressure as a positive because it leaves that up to the market (so it’s not protocol-made which could change in the future by another vote).
While it is predictable, I’d prefer that the returns paid by the decentralized protocol are also somewhat decentralized. So for me ETH would be preferable but if we are into “number go up” RBN via market purchases would also work.
I also prefer ETH distributions instead of USDC. More decentralized, more neutral in terms of choices (why not DAI? USDT? Etc) and more friendly to worldwide institutions who may not do business in USD.
