RGP-8: Sunsetting Ribbon V1 & Fee Change




The Ribbon V1 vaults have been a massive success. Since launching on April 12, the V1 vaults have minted and sold over $2.5b of notional options volumes. Most of the volumes came from 2 vaults: ETH Covered Calls and ETH Put Selling.

We launched Ribbon V2 on September 14th, starting with a conservative cap on the vaults. Ribbon V2 came equipped with a range of new features, most notably:

  • Algorithmic Strike Selection
  • Open Auctions
  • Revamped Accounting and Fee Structure

These features make the Ribbon Vaults the only decentralized option vaults on the market — most other projects have permissioned managers who select strikes and manually execute trades with counterparties.

With these improvements in V2, we have decided to sunset the V1 vaults permanently and fully focus improvements in V2. The V1 vaults will cease to sell options after the 31st of December expiry.

Fee Structure

Currently, the V1 vaults operate under an exit fee structure — meaning users get charged a one-time fee when they withdraw from the vaults. As of RGP-1, these exit fees get redistributed to the depositors that remain in the vaults. This creates a strange dynamic where users may be incentivized to remain in the vaults even if the vault is not selling options anymore, because they want to collect exit fees from the other users.

As a result, we are proposing changing the feeRecipient address back to the Ribbon DAO Treasury on the 31st of December, so that there will no longer be an incentive to remain in the vault after it ceases operations.

Migration to V2

Instead of paying exit fee, users who migrate to V2 vaults will not be charged the fee.

As part of the migration process, we have enabled the following migration paths:

  • Direct, fee-less migration path from V1 ETH → V2 stETH vault
  • Direct, fee-less migration path from V1 USDC → V2 yvUSDC vault (launching this week)
  • Direct, fee-less migration path from V1 yvUSDC → V2 yvUSDC vault
  • Direct, fee-less migration path from V1 WBTC → V2 WBTC vault

The rationale for these migration paths are as follows:

  • We have seen strong interest in the stETH vault, so have created a direct migration path from V1 ETH Vault users to V2 stETH vault

  • If users want to upgrade to the regular non-staked V2 ETH Covered Call Vault, they will need to withdraw their assets from the vault then deposit it again

  • Deprecating the regular USDC ETH Put Selling vault in favor of the yvUSDC ETH Put Selling vault. We have seen significantly more interest in using yvUSDC than regular USDC as collateral (83m vs 5m), so we will deprecate the regular USDC vault in V2.


Snapshot vote can be found here.


Makes sense to me, I support this.

All in on this proposition.

Agreed and in favour of this transition.

+1 sounds good to me. Is there a write up on migration process from a UX point of view? Like, will there be a migrate button added, or will we need to withdraw our position from the v1 vault and then deposit into v2?

There are no V2 put selling vaults, so all users will be forced to withdraw. This will remove $100m liquidity from Ribbon and cost users a 1.0% penalty.

what if you instead change it to the corresponding v2 vault so that users are incentivized to ape over to new vault faster in hopes of collecting exit fees :thinking:

Agree with the proposal.

Personally I was waiting in V1 until I could easily migrate to the stETH vault. Is there any plan to make a migration for this route?

sounds good to me! glad the v2 put selling vaults are being released soon