In RGP-12 [1] we discussed the asset to distribute protocol revenue in to RBN lockers. In this RGP we discuss the % of protocol revenue to distribute to RBN lockers, the rest going to the DAO treasury.
Proposal
We propose to start with 25% of protocol revenue to distribute to RBN lockers. We think this is a solid APY to start with. It corresponds to 36% APY to current RBN lockers (~5M RBN). If the APY becomes unattractive as more RBN holders lock, we have substantial room to increase the % of protocol revenues to distribute.
It is important to note that 36% is the average APY across all RBN lockers. Those who lock for longer will have a higher APY, all else equal.
Currently, circulating RBN supply is 51,586,165 [2] and annualized protocol revenue (in USD) is $7,270,000 [3].
We expect these APY’s to increase naturally once protocol revenue sharing is implemented as this will increase demand to lock RBN, increasing RBN price, which increases vault RBN emissions APY, which increases TVL, which will then increase premiums and protocol revenue as a result.
Voting
Each voter will be able to vote for 25% or 50% revenue split.
UPDATE: The team has reflected on the thoughts/comments in rgp-13 channel, and we have decided to bump up the protocol revenue allocation to rbn lockers to 50% from the get-go. We agree that 25% protocol revenue is quite small as more RBN gets locked. We also think that increasing locking APY should increase RBN price, which increases emissions APY, which increases TVL, which directly increases protocol revenue for the DAO and the RBN lockers. We are going to add the “50%” option to the proposal and let RBN holders decide.
The DAO has an overwhelming amount of RBN in the treasury. So a 100% revenue share but staked treasury would result in a much smaller revenue for genuine stakers
I don’t believe changing the fee sharing % after the APY becomes unattractive is a good idea. We should aim to set it at the rate which we think is the best longterm, or maybe set a predefined upgrade curve beforehand. When you suddenly change the %, you’re changing the fundamental RBN value. Changing fundamentals should be done sparingly and precisely and not just on the go.
This means I will vote for 25% if we believe this is the best longterm setting, but against it if we believe that number will become unattractive and we’ll just bump it up when needed.
In that case we should just set it higher to begin with.
Thanks for the update on this @ken.
I will be voting for the 50% revenue split, this will give us a boost in RBN locking and also allow for enough room on the protocol side to invest in further growth with the other 50%.
I assume under this proposal the treasury would not be locking any RBN?
Also going to throw this out there:
This proposal will normally create some immediate market demand for RBN to lock. It would have been a great opportunity to offer some of the RBN in the treasury to the market in a locked form at a discount. A veRBN bond. I think both increasing the circulating supply and also diversifying the treasury is something we should think about.
