I like Mallo’s suggestion of the slow wallet emissions not exceeding the staking rewards for any given month.
It seems that we have the protocol needing to continually market buy RSR for staking rewards, and the slow wallet wanting to continually sell RSR for funding growth.
Maybe the two needs could be met automatically by the protocol, at least for the next 10-20 years, which may remove any negativity towards the slow wallet.
Ok, getting to the other ideas that have been shared.
Position: Hard-code a release schedule, and direct some fixed portion to Confusion Capital, leaving the rest to DAO control.
Position: Create a foundation.
Position: Make RSR available for use until some milestone is reached, and then burn the rest at that point if there is any left.
Position: Release RSR based on reaching milestones rather than robotically over time.
Position: Do an airdrop.
Position: Use RSR only for building costs. Do not offer any growth or liquidity incentives.
Position: Combine approaches – do some combo of the approaches above, since there’s no hard requirement to do everything just one way.
Position: Go slowly in deciding how this all should work, consulting our advisor network and other crypto projects, to make sure we get to the best answer.
Position: Charge fees on RSR traded on exchanges, and use that income to fund things.
Position: Connect the emissions figure to the amount of staking rewards, which are paid by the protocol purchasing RSR off the market and directing it to stakers, so that additions to circulation are matched by RSR removed from circulation by the protocol.
Position: Offer emitted RSR as an incentive to platforms that bring usage of RTokens.
Happy July 4th to anyone in the US!
This essay does a good job of framing some of the tradeoffs of creating fundamental new value vs redistributing existing value. Said another way, building the future vs optimizing the present.
While this specific model may not be ideal for the RSR community, the framing of options for building the future vs optimizing the present could be helpful for prioritization.
I find it useful to discover and understand outside perspectives. Here is Yearn’s approach to similar challenges in 2020. TLDR: they chose to invest for the future but emphasized the need for clarity on budgets, distribution plans, and vesting schedules to ensure effective capital allocation and long-term growth.
Looking forward to discuss with everyone at Monetarium.
One more to share. For the last two years I’ve been curious about Airdrops. Do they work?
The best sources of data analysis I’ve found is Kerman Kohli from ArcX Analytics. His blog has covered Arbitrum, Optimism, Starkware and many others. Highly recommended reading!
TLDR on Airdrops: they work for hype and short-term dumpers (good for projects that are fundraising and boosting valuation). They generally don’t work for building long term users of a protocol. The data shows that 85 to 95% of recipients generally dump the airdrop within weeks.
Here is Kerman’s post on Starkware which is a nice place to start although I suggest exploring his whole blog. Starkware Airdrop Analysis - Kerman Kohli
Hi Reserve Community,
Glad to see this thoughtful discussion. One of the potential approaches mentioned in the blog post was the ve-tokenomics model pioneered by Curve (veCRV). By itself, ve-tokenomics does a good job of incentivizing locked tokens to align longer-term interests, but the model is incomplete. It was the addition of the Convex layer built on top of Curve that unlocked the promise of the ve-model.
Convex boosted yields for LPs and increased utility by introducing a liquid wrapper for the locked token, but most importantly, it aggregates governance power and creates a market for it, increasing governance participation significantly.
I’m one of the founders of Monarch Finance, where we are building off what Convex started, providing a scalable Convex layer. Reserve is structured very well for ve-tokenomics, and we could be a potential partner in providing that Convex layer if you decide to go down that path. This would create demand for and monetize Reserve’s governance.
Happy to provide more details or answer any questions, but wanted to throw this out there for discussion.
If we get new fintech partnerships whose big mints eat up the eUSD yield (at 100% revshare currently) it would be a good idea to use the Slow Wallet to reward stakers instead of the buyback program. This way fintechs are further incentivized to use eUSD as they can keep 100% of the profits longer while still having a massively overcollateralized eUSD. It would be nice to hard-code these emissions and halve them every 6 months in order to have a simmilar approach as Bitcoin. Follow up the halvings with adjusting revshare percentages. This way we also have the psychological benefit on the market with each emission halving being a positive thing. The Slower Wallet can be used for other purposes. Ofcourse, this can also be done with other RTokens as well.
EDIT: Because of the huge amount with halvings the initial emission would be huge. It would be better to decrease the emissions on a monthly basis for something like 5% for example. This way the initial emission can be lower. However, the minus is it would be bad for the price. Hopefully, there would be a huge rise in RToken mcap which would with decreasing emissions pull in people for the future adjusted revshare percentages which would increase the price with buybacks. A $10 billion token with 7% yield would generate $700 million, if only 10% of that went to stakers it would generate $70 million/year.
The initial emission at 5% down for 20b (in the slow wallet?) would put out 9.6 billion RSR in the first 12 months. At these prices that’s $38 million. So that’s to keep in mind, it would need to be a big RToken to pay off.
Hello,
I saw in your post that you mentioned several viewpoints such as “We won’t promote, if you want to make a fortune in the short term, please switch to a different project” and “What’s a hundred years?” In response to these comments, I have my own opinions to discuss with you
First of all, acknowledge that your vision is very good and has a good driving effect on the current global financial environment, but the value of the project should be reflected in multiple dimensions. If we don’t consider market value and profitability, why did those institutions invest in RSR in the first place? I don’t think they just paid for your vision, right? Value is the best endorsement and recognition of the project? As financial institutions, they are certainly driven by profit expectations, which you understand better than us. In the eyes of ordinary investors, since you are issuing coins, it is definitely linked to value. The value here is the most primitive expectation of the vast majority of Earthlings, rather than the one hundred year vision you advocate. If that’s not the case, why don’t you release tokens in outer space, why do you still need to raise funds, and why do you still need to go on exchanges. After World War II, many sovereign countries were established less than 80 years ago, and some of them no longer exist. During these decades, the fintech war has been constantly affecting the world order. When their sovereign currencies have become worthless, can we expect them to play with this theory? In a hundred years, we will no longer exist, and RSR will definitely cease to exist. Are you confident that RSR will still stand tall in the world financial system in a hundred years? Of course, as you said, you did not publicize that they learned about this project, so it is even more of a false proposition.
Since you proposed a discussion on unlocking the remaining tokens. The performance of RSR on major exchanges is not satisfactory. They either sell or wait and see, afraid to hold. Perhaps you really don’t care about the market value and are determined to achieve your desired vision, but 99.99% of the investors you face are ordinary investors. We don’t have the same pattern as you. We are more concerned about where RSR can go because we are real money holding and paying for your vision. When you mentioned that it may take several months to discuss and determine the final outcome, the person in charge informed you. The few months you mentioned will become a vacuum for ordinary investors, which will deal a greater blow to the previously unknown RSR. So please, in the spirit of being responsible to RSR itself and investors, carefully consider the token unlocking plan and listen to the voices of investors. Don’t be stubborn and only consider those vague theories.
Thank you for reading!
It would actually be even better to give RSR to fintech apps using it so we further incentivize expansion.
Fintechs already use the stablecoins they have to lend and generate revenue, if we add a certain 3-4% to the yield the stables generate themselves it would be the biggest earning opportunity on the market. It would only make sense for everyone to use eUSD instead of other stables.
Reaching some 12% APY would most likely fetch huge clients. Why stop at 12% though?
Make an initial 1 billion RSR emission that goes to stakers and fintech apps and decrease the emission by 5% each month.
That’s 5 600 000$ in additional revenue in the first month. This huge yield would certainly attract numerous fintechs to join the RToken revolution.
Not only would this solve the issue of fear regarding the locked supply, but it would also bring positive psychological reinfercoment regarding the monthly emission decrease and heavily incentivize fintechs to use eUSD as it would in the beginning give even over 40% APY while being the safest stablecoin on the market.
So with the latest meltdown in price we can see supply does make a difference. Can’t ignore that when people get nervous holding stocks , crypto , ect… when market takes a dive they sell .
Looking at coins such as XRP, XLM, HBAR they have lots of supply and can barely move up they move down pretty hard but struggle moving up. Supply is a major factor for new investors as well, when I look at a new project, I do not just look at supply but it is a major part of my determining whether invest or not.
If there is a use case that will take a major amount of RSR to move daily to satisfy the Markets and help in rising the price then yes. I would as most investors approve of more supply, but not just for trading purposes . I also believe that we( holders of RSR)should know the use case, not a blind trust. This is major sticking point I want RSR to make a difference in the world and achieve its goal of fighting inflation, but understand that people like me are also here to make money as well as fight inflation. I can’t nor can anyone else including Warren Buffett , Elon Musk, ect… lose money and expect returns 15 -20 years down the road If we get caught looking to forward we might not see whats right in front of you.
Theres are a lot of forward thinking but you also need to live in the present not a what if this happens in 15 years. Supply will make a difference in future investors , and it will take investors to make RSR a sustainable whether is small investors or big companies that invest. You have stated that Reserve has money at this time . So look at locking for 5 years and then a slow release of 1-2 billion per year after . or burning the rest of the supply. If the project is going to survive it’s going to take discipline on where to spend RSR value at .
@nevin.freeman When do you expect the teams will progress the above suggestions/ideas? Could you share a concrete timeline for the community please?
One simple question, does not the $ value of RSR hold the most significant ecosystem benefit for Reserve? What is the use of billions of tokens that are worthless. Makes no sense.
Thanks Nevin, been thinking a lot lately about the RSR unlock schedule, especially with the plan to hardcode it at some point. Just wanted to throw out a thought that keeps circling in my head.
Time-based unlocks are simple. Predictable. You know what you’re getting. And in many cases, that makes sense because it removes discretion and gives clarity. But with RSR, I’ve been wondering if that structure really reflects how the token captures value.
Bitcoin “earns” its emission through continuous proof of work: energy, computation, block validation, no middleman. RSR, in contrast, draws its value from protocol traction: growing TVL, fees flowing, governance usage, burn pressure. It’s tied to what the system does, not just how long it’s been running.
Right now, unlocks are happening on a regular schedule, no matter what’s going on in terms of actual usage and adoption. And while that keeps things moving, there’s this growing sense that the pace of emissions might not be fully matched by the protocol’s current ability to absorb them. More RSR is entering circulation than what’s being justified by demand fundamentals or by the value RSR is actually generating through real KPIs.
That’s not necessarily a problem, but it feels worth looking at more closely before locking anything in permanently.
So here’s a thought. What if instead of going fully time-based, we used a hybrid model? Still hardcoded, fully autonomous, no manual triggers. But the unlocks would follow a baseline schedule while layering in milestone gates. Major tranches would only release once certain on-chain thresholds are hit (TVL caps, cumulative fees, percentage of RSR vote-locked, total burn volume and others). All measurable, verifiable, and automatic. If a milestone isn’t met, that segment of supply just stays locked until it is.
The idea isn’t to slow things down. It’s to make sure emissions track with protocol maturity. When usage is strong, unlocks proceed. If adoption pauses, the unlocks wait too. Still transparent. Still predictable. Just more aligned with how value is actually being created.
I get that this adds complexity compared to a linear decay curve. But maybe that’s the tradeoff. If RSR is going to stay central to the protocol’s future meaning it’s the engine of coordination, governance, and value flow, then maybe it’s worth anchoring emissions to real usage. If RSR is meant to play a smaller role, then the simpler route might be fine.
If emissions were clearly fueling protocol growth, if they were visibly aligned with adoption/burn/governance or any tangible feedback loop, people would still have opinions, but I doubt the same level of “concern” (allow me to use this word) would be there.
That’s not to say we need perfect alignment or a naive open-cards game that’s basically feeding yourself to the competitors.
But when value flow is unclear, even modest emissions can feel oversized. And when value is evident, even large emissions can feel earned.
Maybe that’s the frame we should keep circling back to: how do we make emission feel earned or part of a “living proof of work”.
It’s not so much about the size or speed of the unlocks per se IMO. I mean, it is but on a deeper level it’s about the disconnect or the sense that dilution is happening without corresponding value creation and without the kind of transparency or alignment that helps communities feel invested in the long-term architecture.
If we’re building a new kind of financial architecture, then the token that’s supposed to underpin it should reflect that ambition. Therefore, we should make sure every single RSR token being unlocked is released into the market in the most effective and (strategically) transparent way possible.
@PostAurum “living proof of work” resonates.
It has been just over a year since the decision to hardcode RSR’s supply curve to emulate Bitcoin. The curve is implemented manually, not yet hardcoded.
With the luxury of hindsight and fresh perspective, the Bitcoin comparison reveals gaps. Bitcoin is fully transparent onchain, no middlemen, distributed via proof of work.
RSR emissions allocations are currently distributed through mechanisms largely opaque to the community, a condition unchanged even under the proposed hardcoded contract since it does not track recipients.
Two debates stand out. One is the right emissions timeline. The other is how the community feels ownership of that timeline and its effects.
Whether ETH’s lower emissions curve is the closer comp for RSR, or #1 DeFi TVL Aave’s DAO model offers a stronger allocation design, I don’t intend to add further to that debate at this time.
I do want to double-click here into ‘the feeling’ of community ownership. Its the powerful ingredient behind when cult brands like Apple, Nike, Bitcoin, Ethereum and even early America are at their best.
Are the RSR community ‘subjects’, or ‘owners’ of the ecosystem?
Confusion Capital allocates RSR across core protocol development/growth/comms, investments into portfolio companies and industry initiatives. RSR holders (investors, employees, partners, and community) are the liquidity cushion funding those decisions, they pay the bill. Yet the value loop between allocation and community ownership looks absent.
There are several ways for the feeling of ownership to emerge:
-veRSR-style gauges to help prioritize the menu of RSR allocations
-Tokenizing a basket of Confusion Capital LP positions for RSR holders’ shared ownership.
-More consistent comms so the community can vest in what works and what doesn’t
Other ideas will surface, but sustainable scaffolding needs a foundation and launchpad. The chicken-and-egg dilemma is amplified by limited community ownership so far, which is why it makes sense for Confusion Capital to take the lead.
When the community are vested in the mechanics, they come from a deeper place to help create and amplify outcomes at greater scale.
Volleying $56.68 memes, popular in the Reserve community, are fun entertainment. However, a community created Reserve protocol breakdown with 5,658 comments in the discourse dabbles in transformative impact. Whatever the community that arises, it is a deliberate choice, shaped as much by action as by silence.
In America today, debt stands at $36 trillion and the dollar has lost 90% of its purchasing power since 1971. It is an awkward example, but a telling one. A small group (the 0.1%) remains comfortable with this outcome because they co-own the system, understand how it works, and know how to get ahead while the masses were placated with fast food, cheap screens and prescription drugs.
Reserve has the chance to chart a very different path, bringing the entire community into the feeling and understanding of ownership, the ethos of web3. Then scaling this model globally, and potentially multi planetary.
At the center of this ecosystem must be a shared, living, proof of work worth awe.
Whether the current emissions curve proves optimal or not, we will own the outcome together, course-correct together, and prosper together. Sharing and owning the proof of work improves our chances of success.
Both @PostAurum and @0xJMG ‘s replies are highly valuable and deserve to be read, contemplated and addressed by the team. I don’t think the emissions schedule in itself is either good or bad at this moment. But I have to admit that requires quite a high level of trust and confidence in the team to do the right things with the massive amounts of monthly unlocked RSR. A level of trust and confidence that I have, but is not necessarily shared by everyone and certainly not by default by people just learning about Reserve. And even for me, there is a level of ‘discomfort’ in the lack of transparency with regards to the purpose/actual usage of the unlocked RSR. I don’t think it is ‘dumped’ in large quantities, but to be fair I don’t really know. Currently, about 600M RSR is unlocked each month - about $4,8M based on current RSR price. Whilst that is a lot of money, there are also a lot of bills to be paid (teams, marketing, communications, legal/tax support, etc). Some of the unlocked RSR will be sold for that reason I imagine, some of it will be retained to either just hold, stake or vote-lock. And some of it may be used to incentive/rewards programs. I think. In any case, assuming not everything is sold right away (which I believe was confirmed by the team earlier), ever-increasing substantial amounts of RSR are held in a very centralized way. To be sure: I don’t think or expect Reserve should justify in detail what is being done with the unlocked RSR. At the same time, no justification at all seems a bit ‘light’ and is doing a level of injustice to the other RSR holders. I am fully with PostAurum that it would make sense that unlocks should - even on a very basic level - also be driven by KPI’s/events. Levels of TVL could be a factor, burn%, RSR price. Explaining the latter a bit further: suppose RSR price is going up 10-fold in a short timeframe. Would you still want/need to unlock ~500M-600M RSR - or effectively $40-50M monthly? Or would you (need to) reconsider what amount of RSR is needed to unlock to fund operations and secure future runway? And what is the reasoning to determine this. All in all, when unlocks can be better linked to actual usage/needs/achievements (now or in the future) they will start to make more sense and become less of a deterrent to current and future Reserve believers and/or RSR holders.
This to me seems like a very powerful approach. Gives the community ownership, rewards long-term conviction, and could be made so that ve-emissions match and amplify protocol revenue.
Given that CC and ABC Labs shoulder the brunt of the development effort, and are doing a stellar job there, considerations have to made to ensure their operations are funded and can remain so with enough long-term planning security, while at the same time increasing transparency so that the community feels like an integral and equitable partner in the enterprise.