RGP-33: Merge Ribbon Finance into Aevo

Proposals
1

Proposal

Introduction

Ribbon Finance is the first protocol developed by the team over two years ago. It is the first and largest DOV protocol, offering covered calls, put-selling, as well as principal-protected vaults with $300M TVL at all-time-high. Ribbon is the brand that the internal community and the crypto community at large knows us by. After experiencing first-hand the limitations of DeFi options including gas fees, latency, liquidity, and capital efficiency the team started building Aevo.

Aevo is the first Derivatives L2, focused on options and perpetuals trading. Aevo Exchange is a highly robust options and perpetuals CLOB exchange built on the Aevo L2 rollup on the Optimism stack. This architecture allows for low gas fees and low latency whilst significantly improving liquidity and capital efficiency. In just 3 months, Aevo Exchange has achieved over $150M of cumulative trading volume, including highs of over $10M in 24H volume and $10M in open interest — making it the largest options-trading venue in DeFi.

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Proposal

The vision is for Aevo to become the best place for derivatives on-chain. This includes exchange-traded options and perpetuals contracts, over-the-counter derivatives contracts, and structured products including both passive (vaults) and active products. By combining Ribbon and Aevo, Aevo stands to become a DeFi super-app which offers perpetuals, options, and yield products all under the same roof. Users will be able to seamlessly navigate between Aevo exchange, OTC, and structured products within the same interface. Importantly, this also brings us one step closer to deploying structured products directly on the Aevo rollup, unlocking synergies between the exchange and vaults.

To support this vision, this proposal aims to unify the Ribbon and Aevo brand and restructure governance and tokenomics in order to maximize the success and growth of the products and instill confidence and alignment within long-term token holders.

We propose two changes:

  1. Position Aevo as the unified brand, folding Ribbon Finance into Aevo’s suite of structured products offerings alongside the exchange. All components of Ribbon Finance, which includes the user interface, visual design elements, communication channels, and importantly governance, will adopt the Aevo brand
  2. Wind down Ribbonomics and enable $RBN holders (and lockers) to migrate to $AEVO, a new token to be launched on ETH mainnet, which governs the Aevo protocol and chain. New $AEVO tokenomics will be discussed in a subsequent proposal

Aevo: Rebrand

Practically, folding Ribbon into Aevo would require the following steps:

  1. Move Ribbon Finance from app.ribbon.finance to strategies.aevo.xyz
  2. Apply Aevo visual identity to Ribbon’s structured products
  3. Use Aevo instead of Ribbon Finance across all internal / external sites (communications on discord/twitter/blogs, labels on aggregators/dashboards, etc)
  4. Host new governance proposals / snapshots under the Aevo namespace

Governance and Tokenomics Restructuring

The $RBN token went live two years ago as a means to govern the Ribbon Finance protocol. Subsequently, Ribbonomics went live to offer utility to the $RBN token via redirecting gauge emissions and revenue-sharing. Our mission and vision has evolved considerably from just democratizing structured products to being the L2 rollup for all derivatives trading. It is time to re-adapt and make sure the governance process and tokenomics address the expanded vision and scope of new products we have, including the perpetuals and options exchange.

The restructure has three distinct parts

  1. Launch $AEVO token which governs the options and perpetuals exchange, OTC, the existing structured products, and the Aevo L2 rollup itself. This converts Aevo into a DAO
  2. Enable $RBN holders to migrate to $AEVO at a 1:1 exchange rate
  3. Ribbonomics wind-down
    1. set $RBN emissions to 0 across all vaults
    2. allow veRBN lockers to unlock 100% without any penalty
    3. stop vault revenue-sharing with veRBN lockers

Launch $AEVO

Aevo will be converted into a DAO, allowing tokenholders to govern the options and perpetuals exchange, OTC, the existing structured products, and the Aevo L2 rollup itself. As part of an effort to rebrand away from Ribbon Finance / $RBN, the cleanest and most logical approach is to start anew with a new token $AEVO, whilst preserving all existing proportions of governance rights of existing $RBN holders.

AEVO Details

  1. 1,000,000,000 $AEVO will be minted upon launch. The total supply is the same as $RBN.
  2. The investor/team/treasury allocations will remain the same
    1. In order to re-align long-term incentives and demonstrate confidence in the Aevo Derivatives L2 vision, all major investors and team members have agreed to re-vest their unvested tokens for another year. This portion is around 10% of FDV
  3. At first, $AEVO will only have governance rights. A revision of the governance rules, necessary to take into account the evolution of the protocol, will be discussed in a subsequent proposal such as sub-committees.

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Note: The DAO treasury has always had 45.6% of the token total supply — 342.8M RBN (34.2% of total supply) is vested and included in the circulating supply category, and 113.5M RBN (11.35% of total supply) is still vesting and included in the DAO treasury category.

Enable migration from $RBN to $AEVO

Upon $AEVO launch, all $RBN and $veRBN holders will be able to migrate from $RBN to $AEVO 1:1 in order to participate in the Aevo DAO governance. This will always be available.

Ribbonomics Wind-Down

Ribbonomics are tightly coupled with the DOV’s which are only a subset of our protocol. Rather than retrofitting new tokenomics, especially those of something on the scale of a perpetuals/options exchange, onto the existing mechanism, the more prudent approach is to build out a new tokenomics from the ground-up that involves the exchange, OTC, structured products, and the L2 itself. This will be the subject of a future proposal if this one passes.

Set $RBN emissions to 0 across all vaults

If this proposal were to pass, maintaining vault emissions is the same as distributing new $AEVO as it is now convertible to $AEVO 1:1. Given the rebrand and the creation of the Aevo DAO, it makes sense to think more deeply about $AEVO emissions and tokenomics in general within the broader context of Aevo as an exchange and rollup, not just a structured products offering.

Allow veRBN lockers to unlock 100% of $RBN without penalty

Lockers should have the ability to migrate their locked $RBN for $AEVO without any penalty. We will enable no penalty 100% unlocks at any point.

Stop vault revenue-sharing with veRBN lockers

veRBN was designed to be a hard staking mechanism, meaning that you must lock your RBN for a pre-defined period of time. Lockers are rewarded with 50% of protocol revenue due to the opportunity cost of being locked.

Indefinite penalty-free unlocks effectively turns veRBN into a soft staking mechanism, allowing users to enter and exit for free. This fundamentally changes the voting escrow mechanism since lockers are no longer “locked” and do not take RBN out of circulating supply. There is no longer a risk that lockers need to be rewarded for.

The 50% protocol revenue will be re-diverted back to the Aevo/Ribbon Treasury multisig, to be used towards the growth of the Aevo protocol.

Conclusion

Over the past 3 months, the team has delivered a non-custodial options and perpetuals exchange built on Aevo L2, a custom rollup on the Optimism stack. We’ve solved the perennial problems plaguing the scalability of DeFi options, namely gas fees, latency, liquidity, and capital efficiency. Our CLOB exchange operates with 0 gas fees for the user, 10ms median order latency, 10k+ orders per second, active market makers, and a shared margining system between perpetuals and options. We believe Aevo L2 can be the largest on-chain venue for settling exchanged-traded derivatives, OTC derivatives, and structured products.

This proposal is a monumental step for the Ribbon Finance / Aevo identity, product, and long-term trajectory. Uniting the perpetuals and options exchange, the OTC product, and structured products under one brand governed by a single token will attract new users, reinvigorate excitement amongst existing users, reduce product friction, and realign long-term incentives within a new governance structure.

Next Steps

By voting yes to this proposal you support the rebrand, the creation of the Aevo token, the migration, as well as winding down Ribbonomics. We will leave this up for discussion in Discord and put it up for a snapshot vote once the proposal has been discussed sufficiently.

EDIT

We made a snapshot of all 2yr lockers and we are preparing a special surprise for them!

9 Likes
2

LFG. Supportive of this token swap.

1 Like
3

Generally very supportive. Two points:

Firstly, it would be nice if rbn lockers were rewarded higher than 1:1 given their buy in to the product and vision.

Secondly, do we get new hats? :rofl:

4 Likes
4

Supporting this, big ups.

Send it.

5

Agree, hardcore do-or-die community lockers need to be rewarded

3 Likes
6

like the proposal and support it!

The migration plan looks great. I hope that $AEVO will not be a useless governance token, and will also have some opportunity to show tokenholder his stickiness (faith in the project in longterm) and claim a share of the proceeds from the protocols (as it was with $RBN).

LFG!

7

+1 for this.

There will be gas costs to migrate to the new token. It will reflect well if users are compensated for that, and can serve as an appreciation for their long-term support!

Alternatively, you can take a snapshot of RBN & veRBN holders and allocate the AEVO tokens accordingly during contract deployment.

Some NFTs were distributed for the early supporters of Ribbon, I am wondering if we should get equivalent NFTs for AEVO or some other reward :slight_smile:

8

2nd’ing the new hats :grin:

9

When will the merge be completed by and
Why does my coinbase portfolio say my rbn tokens are at .20, Is RNB still trading?
I’m new to the process and would like to understand how this comes together.
How is voting on the proposal carried out?
Thanks for any help

10

I’m in for the proposal. There’s a bit of an arbitrage opportunity at the moment. Do we have any update on the status of this? Specifically, when will the merge take place (assuming this is a Go)?

11

Are your tokens transferred into the new Coinbase trading platform? I had a similar issue until I moved the tokens from the Coinbase Pro bucket back to Coinbase. I’m pretty sure you’ve figured it out by now. Apologies for delay in reply. Cheers.