RGP-9: Ribbonomics


RBN is the governance token of the Ribbon Finance protocol and is used to vote on decisions pertaining to the protocol. But it is just that - a governance token. We want to tightly couple the success of the protocol with the success of RBN, and vice versa, by providing utility to RBN.

Introducing veRBN, Ribbon’s adaptation of Curve’s successful and battle-tested veCRV tokenomics model [1].

In addition to current voting power, RBN will have the following additional utility:

  1. more RBN staked = more $RBN rewards user receives on their staked vaults tokens a.k.a boosting
  2. more RBN staked = more voting power on redirecting liquidity mining rewards to the vault gauge user is staked in
  3. more RBN staked = higher share of the protocol revenue (will be introduced after initial launch)

Before proceeding, please read our Ribbonomics [2] article for context. Note we have abandoned the “protocol backstop” from the article.


This new “ribbonomics” architecture impacts two groups:

  1. Options vault depositors
  2. RBN stakers (veRBN)

Vault Depositors

Vault depositors will be able to stake their vault tokens (ex: rETH-THETA) in a gauge and earn $RBN. As an example, vault staking in the ETH covered call vault goes as follows:

  1. Deposit ETH into the covered call vault
  2. Wait until the upcoming Friday which is when new funds will be collateralized. You will have nothing to stake beforehand
  3. Stake rETH-THETA shares in the rETH-THETA gauge and receive rETH-THETA-gauge tokens.

Given the proposed emission schedule (later in the proposal) and assuming equal distribution between all vaults across all chains, the APY % will look roughly as follows.

The exact % APY you will be earning will depend on (1) vault gauge reward allocation for the vault you are staking in (2) individual RBN balance.

RBN Stakers

In addition to both RBN holders and veRBN holders being allowed to vote on governance proposals such as this, RBN stakers will have four new powers: boost $RBN rewards earned on staked vault tokens, delegate boosts, voting power on $RBN reward distribution amongst vaults, and higher share of protocol revenue.

RBN stakers will have the choice to stake their RBN anywhere from 1 week to 2 years. The longer you stake the more power you have on all fronts.


In the Curve ecosystem, as a veCRV holder I can boost the rewards I earn on any gauge I deposit into up to 2.5x. For example without veCRV holdings a curve stETH-ETH LP gauge staker might earn $100 in CRV. But depending on their veCRV balance they could be earning as much as $250, or a 2.5x multiplier. This is what’s called “boosting” [3]. You can read a concise guide here as well [4].

We will have this as well, except instead of a liquidity pool gauge, we have options vault gauges.

Boosting Delegation

RBN stakers will have the flexibility to delegate their boosts to other users if they so choose. They can either do this for altruistic purposes, or more likely, for bribes. Imagine that you don’t want any exposure to the options vaults so you are not staking vault deposit tokens. But you have staked your RBN. You will be able to delegate your boost to others who are staking vault deposit tokens and receive some reward from them for doing so. This allows you to reap all the benefits of staking RBN without having to actually deposit into the vaults.

Gauge Weight Voting

As a veRBN holder, similar to veCRV holders [5], you will be able to vote on RBN distributions to the respective options vault gauges. This is extremely powerful since you can vote to direct more RBN rewards to the vault you are staked in! Alternatively, similar to boosting you can accept bribes to redirect liquidity to a particular option vault gauge. Further details are in the Gauge weights section.

Protocol Fee Sharing

Ribbon Finance takes 10% performance fees and 2% management fees. For now, 100% of this is sent to the Ribbon treasury.

After we launch veRBN, we will begin discussing protocol fee sharing in which some % of protocol revenue will be redirected to RBN stakers pro-rata. This is exactly what Curve does except instead of redirecting profits from option premiums it redirects profits from LP fees [6].

We are thinking about two approaches:

  1. Take the performance/management from all the vaults (ETH, WBTC, USDC) and buy back RBN from the market and distribute that to veRBN holders. On one hand this creates constant buy-pressure on RBN similar to xSUSHI. On the other hand if RBN is not doing well, the profit sharing APY will be low.
  2. Take the performance/management from all the vaults (ETH, WBTC, USDC) and convert it to stablecoins and distribute that to veRBN holders for reliable cash-flow. On one hand this provides reliable returns. On the other hand, there is less buy pressure for RBN on the market.

RBN emission schedule

The current RBN circulating supply today (as of Feb 8th) is
51,318,849 RBN.

We propose an emission schedule of a constant 250K RBN per week over the course of 6 months. This is ~6.5M RBN overall, or 0.65% of total supply.

We feel this is an optimal emission schedule to provide just enough RBN rewards in addition to our existing sustainable yield. This will draw in new users without diminishing marginal returns in over-rewarding, which will attract more mercenaries.

Regardless, we always have the flexibility to adjust the emissions per week either higher or lower, given sufficient support from RBN and veRBN holders of course. After 6 months, assuming no changes until then, we will officially revisit the emission schedule in a new proposal.

Note that the current emission schedule has been simplified to focus only on RBN entering circulation from emissions. This does not include team and investor unlocks that will happen starting from May, halfway through the current emission schedule proposal. For more details please read RGP-3 [7].

On-chain Gauge System to determine Liquidity Mining distribution

As mentioned earlier, veRBN holders have the power to vote on gauge weights, or RBN reward distributions. For example, let’s say the rETH-THETA staking gauge has 25% allocated to it in RBN rewards out of the total emission that week. A veRBN holder can choose to increase the allocation by voting for that gauge on a weekly basis. He might choose to do so for several reasons, including bribes from other vault stakers or he himself is a staker in the ETH covered call options vault gauge.

As a result, the APY’s for each options vault gauge will change accordingly based on reward distributions. One week the APY for the ETH covered call vault gauge might be 50% of all emissions, and the next it could be 35%. This means less APY for that vault during that week.

Gauge types

There are different gauge types that are used in the ve system, each type gets a fixed percentage of the RBN supply minted weekly. Within each gauge type there can be many gauges that share the amount of RBN sent to that gauge type. The following gauge types and weights are proposed:

  1. Ethereum mainnet options vaults: 100% (250,000 RBN / week)

New gauge types can be added and the weights/percentages of all gauge types can be changed by governance. We will shortly be voting to add Avalanche and Aurora gauge types alongside Ethereum mainnet.

Initial gauges

At launch, we will add gauges for all existing mainnet options vaults:

  1. Covered Calls: BTC, ETH, stETH, Aave
  2. Put selling: yvUSDC

We will initially disable voting by veRBN holders for a more gradual launch and instead will snapshot the gauge weights based on TVL on Feb 23rd:

Upgrading the system

We have the optionality to unlock all locked RBN ahead of the max 2 year lock. If we find the current system does not work for the Ribbon Finance protocol and community further down the line, no matter how unlikely, we will have the option to abandon it if the community agrees.

Given the speed of change in DeFi, being able to change our minds about something as fundamental as the tokenomics model is crucial to remain vigilant, especially in a space as competitive as DOV’s. We think we can maximize tokenholder value this way over having an immutable tokenomics architecture and predictable emission schedule for years to come.


The veRBN aims to achieve several things:

  • Long-term alignment. By locking RBN, we incentivize long-term support over short-term speculation.
  • Grow TVL. By incentivizing vault depositors, we intend to grow our user base and total value locked.
  • Composability with other protocols. This will incentivize several other protocols like Yearn and Convex (and many more) to build on top and interoperate to create a flourishing Ribbon ecosystem. This will increase our distribution channels, innovation, and scarcity for RBN.


To have a controlled and gradual release, we will unlock features of the veRBN architecture in phases instead of all at once.

Phase 1

Immediately after this proposal passes we will have:

  1. LM rewards for vault depositors (with initial gauge weights)
  2. RBN staking boosting

Phase 2

One month after launch we will have:

  1. Boosting Delegation
  2. Gauge Voting

Phase 3

Protocol Fee Sharing. Release is TBD


We have listened to the community and have decided to make two changes to the

existing proposal:

  1. veRBN withdrawal penalty. Originally, if a user wanted to lock RBN for two years they would be unable to withdraw it earlier. Now, users can unlock their RBN whenever they want at the cost of paying a penalty. The penalty is calculated by taking the minimum between .75 and (time left until unlock) / 2 years. For example if you have 1 year left on your lock, the penalty is min(.75, 1/2) = 0.5. So the penalty is 50%. All penalties will be redistributed to the remaining lockers pro-rata. This is identical to the dynamic implemented in the veYFI proposal [8].

  2. Retroactive protocol revenue. Protocol revenue will be retroactively rewarded based on when veRBN locking initially opens up. So somebody who locks at the beginning will earn more of the protocol rewards than somebody who locks right after protocol revenue is implemented, all else being equal. This rewards rbn lockers protocol revenue from day one, albeit rewards are available in phase 3.

We will keep this proposal open for another two days to discuss the changes, after which voting will be open on Snapshot for three days.


The snapshot vote will be a single choice vote. You may vote on the proposal by selecting “Yes, let’s do it” or “No, this is not the way”.

Thanks to Curve dev team and Michael Egorov for feedback, also thank you to Curve for having created this great tokenomics system and also to Balancer [9] for inspiration for this proposal!


  1. veCRV overview
  2. Ribbonomics overview
  3. Gauge boosting
  4. Gauge boosting guide
  5. Gauge voting
  6. Protocol fee sharing
  7. RGP-3
  8. veYFI
  9. Balancer governance proposal

Love this one over the other.
" Take the premiums from all the vaults (ETH, WBTC, USDC) and convert it to stablecoins and distribute that to veRBN holders for reliable cash-flow. On one hand this provides reliable returns. On the other hand, there is less buy pressure for RBN on the market. "

Well done on an excellent proposal.

I particularly like the boosting delegation. I have a lot more value in ribbon than i do in the vaults so for me this is perfect. There will be people in the opposite position making it ideal for all parties.

With regards to protocol revenue sharing, being paid in yield varing assets makes sense to me. So either deposits in to a vault (eth, stables etc) or more veRBN.

Well done again.

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Very disappointed in the removal of the protocol backstop. Would love to learn more about your reasoning on that front.

2 years seems good lock time imo.

Regarding Additional Utility , feels like it could be better framed.
Staking 100 RBN for 2 weeks will have less rewards received than staking 50 for 4 years. I don’t feel any of these points adequately reflect the timelock in that sense. Furthermore point 3, is purely timelock influenced, as rewards are proportional and not boosted.

Love that you are adding delegated boost right off the bat. I think this is very important. May be worth reaching out the Paladin team to see about having a Warden like market spun up for lending boost.

Regarding Protocol Fee Sharing, I think ETH should be in consideration as well. While buybacks are nice, a lot of users will be earning rewards in RBN via gauges, and feel its a nice aspect of CRV that you have some revenue that’s in an 3pool. I think while stables lock in rewards and make them look nice in bears, it can have the opposite effect in bulls, and might be nice to give rewards in ETH which will look better in bulls and worse in bears

Regarding Disabling Gauge Voting for a month, feels kinda ineffective. It sets up a more drastic impact later as voters aren’t changing current votes, but completely restructuring them, which might see vastly different gauge rewards that week. An alternative approach might be to balance the vote between a team vote and gauges, maybe start 90/10 in teams favor and slowly shift the weight to the DAO over the course of a few months to allow a smoother from initial reward rate to DAO desired rates without a massive shake up at transition time.

Regarding Upgrading the System. When asking folks to stake on an extended time commitment, imo any change to the issuance rate directly impacts rewards. Any upgrade process should include the ability for users to take the opportunity to exit their lock up. I’d also be interested to know if RBN holders who will retain some governance power will be able to vote on such an upgrade?

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this is a good point, and earning vault tokens themselves could be a cool way to distribute rewards.
Curve distributes 3pool which does not earn CRV until claimed and staked in a gauge. I think paying in an unstaked Ribbon vault token would be nice in some respects.

Dear Ribbon-people,

I have read the RGP-9 with interest and have some comments.

The Ribbonomics proposal is not bad at all, I have seen far worse. That being said there are some issues with following the Curve example that could need a discussion before a Ribbon implementation.

I will start by stating the obvious - Ribbon a different type of beast compared to Curve. Ribbon is first of all far less dependent on early critical mass, and accordingly far less RBN has been distributed to early adopters compared to Curve.
Curve is very much on the forefront of defi innovation and they need to keep a keen eye on developments in order not to miss out. You could argue that Convex exists simply to take advantage of things Curve should have built into the platform to begin with.
Ribbon on the other hand has much more conventional products and I dare say the project might have done without a token at all, except the need to reward early investors. Ribbon Finance could just run the Ribbon codebase as benevolent dictators and just use value locked compared to competitors as a measure-stick for success.
But that is just what-ifs and the fact is that Ribbon has completed MVP and is within maybe a year or three from being more or less finished, even if you include such things as making the protocol permissonless and moving the project to Starknet or Polkadot.
And this is while still sitting on a huge pile of RBN tokens that you now need to find a use for. That just goes to show that success creates its own share of problems - what do you do when nearly 95% of tokens are not circulating yet?
Needless to say something needs to get done about this if you want the RBN token to be considered investment grade prior to vesting ending in May 2024.

So to be specific about RGP-9:

  1. The proposal needs to be very careful about the bribing mechanism. You risk having very good products with a solid user base getting badly treated because there are huge amounts of RBN sloshing around with nothing to do except to look for bribes. In other words the interest gap between users and tokenholders could easily become too large. The economics could also becomes skewed, with new pools not receiving their share as older pools are path-dependence locked, limiting innovation.
  2. Both delegation and gauge weight will work differently for Ribbon compared to Curve. While Curve is defi hot, their income is fee-based and probably more stable compared to Ribbon which will be more dependent on token value. Accordingly, incentives that work on Curve might not work as well on Ribbon as income will be much more lumpy.
  3. Please seriously consider if you intend to finance the running of the protocol through fees or token sales. Right now you are doing both and it looks suboptimal.
  4. I do not really feel comfortable staking earned RBN for up to 2 years when there is going to be a massive increase in the circulating RBN. It will 99% likely be better to just dump the earned RBN and buy it back cheaper at a later stage.
  5. Minor issue: you are using the term inflation when you are really talking about emission. You are not proposing to print new RBN.

All in all I think this is a very promising proposal, it just needs to be paired with a realistic vesting parameters. There are multiple ways to do this: extending vesting so the released RBN does not compete with staked RBN, drastically shortening vesting so tokens are released and RBN made investment grade or even burn most of the remaining pile.

Options…so many options.

Great proposal, looking forward to its implementation. To clarify - there are no new $RBN created, but rather issued from treasury? Emission/Inflation terms are not always consistently used


  • 6.5M $RBN over 6 months seems reasonable emission schedule
  • Personally would prefer to have protocol fee used to buy back $RBN to create a counter-force to whales selling $RBN rewards

Glad to see this proposal out, very excited for what is to come!

I like the moderate emission schedule of 0.65% of total supply over 6 month to start.

Re Protocol Fee Sharing, I would favour option 2). Having cash-flows denominated in USDC allows to calculate a $ denominated yield based on current RBN token price, which should naturally drive demande for RBN if this yield is attractive vs. stablecoin yields available at the time and anticipated future TVL growth. That being said, my #1 preference would be to have the premiums converted to ETH rather than USDC. And alternatively, my #2 preference would be to have those paid in yvUSDC Put Selling vault token (i.e. in a productive token similar to 3pool rewards for Curve).

Re Upgrading the System, agree with @BlockEnthusiast, time-locked stakers should have the option to unlock ahead of any change to the emission rate.

@Planet_X has a very good point here. This is one of the flaw in the Curve tokenomics that Andre Cronje has addressed in its new AMM (I guess most people have been following closely). Maybe the solution is to distribute to time-locked stakers an equal share of the RBN emission than what is going to the option vault gauges (e.g. another 0.65% of total supply for the first 6 month), so they don’t get diluted. This implies that the RBN war chest will be used twice as fast, but that seems only fair to long-term committed stakers.

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I would like to clarify - our supply of 1B tokens is FIXED. I mean emissions entering circulating supply from non-circulating supply.


This sounds to me like a constructive proposal.

Majority of my commentary here in Discord: Discord will post some distilled thoughts below:

  • Who is the ideal candidate to provide bribes?
  • Providing a protocol backstop felt fundamental to me for strong tokenomics; why abandon this?

Having a vote escrow token to help direct where possible claims to losses seems like it could be a good use of governance. If say on a quarterly basis, a vault underperforms, veRBN holders could vote to compensate vault holders who have had losses. Although they maintain the general risk of losing their underlying, they can at least receive RBN to offset some defined loss.

I prefer the idea of using RBN in this fashion versus providing emissions for participants. At the moment, we’ve seen demand without incentivization and vote escrow feels like a complication that doesn’t further adoption. If the main challenge to getting new assets listed on vaults is through the infrastructure (Opyn) - I don’t see how a veToken would incentivize other DAOs to pursue vault listings.

Haven’t seen a lot of discussions to convince me of the current proposal - but keeping an open mind! Currently not in favor.

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Hi all, thanks for the detailed proposal. I’m following conversation in the discord but want to reiterate my thoughts here too.

Overall, it’s critical to improve the use case of the RBN token. But the balance between all stakeholders isn’t clear, and we can’t draw any conclusions from CRV model directly since it’s not the same kind of protocol.

For example, CRV pools, like any LP pool, benefit from incentivizing more deposits. RBN vaults probably don’t see that same benefit.

Some specific “why’s:”

  1. why do we need locked staking? The problem statement seems to be “RBN needs utility” which is not specific enough. What are the specific problems trying to be solved?

  2. Why is vanilla CRV-style tokenomics the best option for RBN holders, vault depositors, and for the RBN protocol?

  3. why do vaults need to be incentivized? TVL for the sake of TVL is not a good reason to exist.

A complete risk-benefit list for each stakeholder will help clarify the “why’s” I’ve asked above. I’m down to help make that list but I’m not an expert on ribbons internal workings so it’s best led by the team.

One specific issue I would see being highlighted by such a list is that RBN lockers have almost 0 downside risk to “deserve” the rewards they get. Especially when liquid staking would inevitably be built on top.

As it stands, I’m a soft “no” on RGP-9.

I like the strategy however I cannot vote since I do not have any RBN tokens.
Does this proposal have a solution for ones who have the most skin (portfolio value based) in the game but missed the aridrop?

@BlockEnthusiast @Planet_X @abipup @DonG_Lover @3.1415r @spyro @lxribbon @bberry259

Why did we remove protocol backstop?

We polled the public and it was extremely unpopular. It didn’t feel like a good incentive structure to have RBN holders have exposure to the options sold.

Can we reward RBN stakers with cash / blue-chips rather than RBN?

RGP-9 does not commit to anything one way or the other. We will introduce a subsequent RGP that focuses entirely on protocol fee distribution.

What if the bribing mechanism misaligns users and tokenholders?

In the case that anything goes wrong and we don’t like the dynamic bribing creates, we can pause it and restructure it.

Will it be a bad idea to lock for 2 years when there is going to be a massive increase in the circulating RBN?

If we feel RBN lockers are insufficiently compensated, we can entertain solutions down the line like emitting RBN to RBN lockers so that they do not get diluted, similar to Andre’s model.

Shouldn’t time-locked stakers be able to unlock ahead of any change in the emission rate?

We will leave as is, and if we cross that bridge we can entertain solutions like RBN emissions to lockers, etc.

Rather than using gauge weights to direct RBN emission, wouldn’t it be better to use it to direct protocol revenue?

We can make these changes in the future if we do not like the current model.

What about some CVX layer on top?

At launch, all wrappers like Convex are blacklisted from depositing RBN into the escrow. We can address the wrapper layer in a separate RGP.

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Thanks for the detailed feedback! I agree with the spirit, let’s experiment and we will adjust along the way, that’s the beauty of DAOs, they are like adapting and evolving organisms.

This one is a major point to me however, as dilution for lockers will start to occur from day one (no game theory at play here, this is 100% certain). My vote will depend on changing that.
Could we do a community poll and if that is the dominant sentiment, aim to fix lockers dilution before any RGP-9 implementation?

This happens with veCRV as well. stakers in curve gauge can sell CRV rewards from day 1. So you have an issue with ve in general, not with adjustments we made for veRBN (or didnt make) right

Exactly, my issue is the same in the original veCRV model. And just to clarify, the issue has nothing to do with stakers in curve gauge that can sell CRV rewards from day 1, this is perfectly fine. The issue is that as a CRV locker, as more CRV are being issued to stakers in gauges, your share of the circulating CRV supply get diluted. Your only way to try to combat that as a locker is to reinvest your 3crv rewards into more CRV, and history has shown me that between gas and increasing CRV price, you are not even close to maintaining your original share of the circulating supply. I think this is a flow in the model and we should address it fro RBN while we still have a chance.

This isn’t a flaw with the “model” per se. Its more of a problem with how much you are diluting vs. how much cash you are giving to rbn lockers. These are two parameters that are different in our case than with crv which has different emission schedule and different 3crv - to - crv staked ratio.

Agree, it’s not a “flaw”, it’s just a matter of value distribution policy across participants. My concern is that, as a locker (taking additional risk because forfeiting liquidity option for at least 2 years, probably more if you want to optimise), because my share of the protocol fees keep getting diluted by new emissions, I might end up in a worst position than if I had use my capital to invest in vaults instead and collect RBN rewards. Of course, there are two key assumptions that will impact the end state a few years down the road: TVL growth and RBN price, and if new emission to gauges allow to growth the TVL much faster than it would have otherwise, it is possible that the resulting increase in protocol fee outpace the impact of dilution. But the case of Ribbon is particularly scary in that regard, because there is currently only ~5.1% of the max token supply that is circulating, meaning the long term impact of dilution will be massive at ~95%, so TVL would need to grow almost 20x from here just to keep up with dilution. For comparison, CRV current circulating supply represents ~51% of the total supply, and started at 43% at launch.

We are suggesting 0.65% of total supply be used for emissions for the next 6 months which is only 12.5% of current circulating supply. If this is too aggressive we can always adjust it and it will also be a reference point for any emission afterwards (that rbn lockers can vote on).