Discussion: RSR emissions approach for the second half of the token supply

Ideas & suggestions
21

I know many have the urge to burn the 50 billion tokens. This might well be the right answer, but I doubt it. Here are three parameters that need to be explored:

  1. Strategic Boosts

Confusion Capital clearly envisions needing to maintain direct control over a pool of RSR in order to continue to direct the growth of the ecosystem for:

  • Incentivizing key individuals to work with the ecosystem

  • Staking on promising RTokens that are not yet popular

  • Investing in key outside businesses that create tie-ups with the ecosystem

The team has been doing all of these things over the past five years, and I don’t think we would be where we are now, if they hadn’t. The question is, are we past that stage now, where we no longer need these strategic boosts? I don’t think that we are, but I also don’t think that this ‘Strategic Pool’ should be used for all things big and small.

Ideally, the ‘Strategic Pool’ should be earmarked right now and remain under the complete control of the team in a slow-like wallet for all to see. The team should view the ‘Strategic Pool’ as a tool to be gradually (or aggressively) used for the next, say, ten years. It should be reserved for major strategic events that they think would be accretive in the long term.

As a side note, strategic staking on promising RTokens should ALWAYS be temporary. Such staking could be viewed as providing a lifeline to an RToken to see if it gains traction. If, after a period of time, it does not, the strategic staking should be removed, and the RSR returned to the ‘Strategic Pool’. [More on why this is important in #2, below].

Additionally, there should be a ‘Success Sunset’ where, if certain milestones for the ecosystem are met, or a certain number of years have passed, the remaining balance in the ‘Strategic Pool’ would be automatically burned.

  1. Cash Runways

In the past, the team have said that they have sufficient cash to fund operations into the far future. However, the scope of the business has changed, and a lot of time has passed. So, I don’t know how long the current runway is. It is important for the team to make sure that their cash runway is sufficient. Their businesses are standalone companies now and should go looking for capital away from RSR.

In addition, the team’s reliance on RSR staking income to fund operations has always rubbed me the wrong way. It effectively skews the economics and crowds out the very market that they are trying to build. It’s fine to strategically stake (as described in #1 above), but only temporarily. Beyond startup friction, RTokens should sink or float on their own merit. This might not seem like an important point, but it is. I don’t want to go down an economic theory rabbit hole here.

To be clear, it’s fine, of course, for individual team members to stake (or not stake) their own personal RSR on whichever RToken(s) they like.

  1. Decentralization

We all know that the long-term aim of the project is total decentralization, but we are not there yet and won’t be for a long time. We will get there as the ‘Strategic Pool’ eventually runs out or is burned under the ‘Success Sunset’ scenario, and it’s up to the team to use the ‘Strategic Pool’ before they lose it.

In the long term, RSR holders might need a pool of RSR of their own, to use in ways that we cannot envision at this time. To that end, I think that it makes sense to allocate some of the 50 billion tokens to a DAO as proposed by others.

How much in the ‘Strategic Pool’ and how much in the DAO?

I think the ‘Strategic Pool’ should not be too small so as to be ineffectual. Making it too large (relative to the rest of the 100 billion tokens in existence) is also not a good idea as it might encourage the team to overuse it. The idea here is to have a strategic tool available to the team to improve on an already successful project, not to create a shadow over it. I think, 10 billion tokens is a good starting point for a discussion.

As for the DAO, the same logic of not-too-small, and not-too-big applies. I think, 10 billion tokens is also a good starting point for a discussion.

So:

  • 10 billion in a Strategic Pool, completely under the control of Confusion Capital, with no limits on withdrawals, and a Success Sunset.

  • 10 billion in a DAO for decentralized use.

  • Burn the remaining 30 billion

  • Figure out cash runways for the companies in a different way, away from RSR

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