[RFC] Addendum to eUSD RevShare with Fintechs

[0xTomSawyer]

Summary

This proposal aims to put forward additional rules for how the eUSD Revenue Share proposal operates with the Fintech Apps. These additional rules aims to improve on the original eUSD Rev Share with Fintechs Proposal:

1. Update proposals won’t reduce the Fintech’s percentages unless the Fintech’s eUSD holdings have decreased by greater than 20%. This aims to not punish the Fintechs for growth in the eUSD Market Cap elsewhere. If the Fintech Apps don’t change their eUSD holdings, but the eUSD market cap experiences growth, according to how the percentages are calculated, they would experience a loss in Revenue, this aims to prevent that scenario.

2. The monthly update proposals will be held quarterly. Monthly proposal changes are too frequent for the Fintechs. Given the nature of the governance process, it takes ~2 weeks to pass a proposal from forum to onchain execution. That leaves an additional two week window for changes to be made until the next update hits the forums. This gives very little time for the Fintechs to reevaluate their holdings while balancing their internal operational work. This proposal will still use the relative change parameters as put forward in the Stable Labs proposal. The only difference is that every new proposal will look at the previous proposal to determine what changes will be made(as opposed to month to month). Stable Labs will be bringing the quarterly rev share updates(at the start of the quarter) to the forums with the title “Quarterly Rev Share Update Q2 25”.

3. An increase by 20% to the Fintech Holdings can trigger a new governance update proposal without having to wait until the quarterly update hits the forums. This is optional or can be requested by the FinTechs if circumstances change in between the quarterly updates. This provides flexibility to the Fintechs that at any point if they increase their holdings, governance will act quickly to get a proposal on the forums. I(Tom Sawyer) will be leading the charge on any in-between Rev Share updates with the title “Change in Holdings - eUSD Revenue Share Update 2025-XX-XX”.

4. Currently according to the initial Rev Share proposal, the RevShare percent is based on the amount of eUSD the Fintech Apps are holding relative to the eUSD Market Cap. This proposal suggests that the new rule should be the amount of eUSD the Fintech Apps are holding relative to the eUSD Market Cap times 2. The RevShare proposal is working but the flywheel effect is slow moving and we have yet to see hockey stick-like growth to the upside in the eUSD Market Cap. This aims to kickstart that flywheel effect even more.

Current eUSD RevShare Split:

• Ugly Cash: 4.3%
• Sentz: 4.9%
• stRSR: 87.8%
• RToken Champion 3%

Proposed eUSD RevShare Split:

• Ugly Cash: 8.6%
• Sentz: 9.8%
• stRSR: 78.6%
• RToken Champion 3%(No Change)

FinTech App Revenue Projections:

Fin Tech	Earnings/year	Proposed Earnings/year
Ugly Cash	$54,277	$108,554
Sentz	$61,850	$123,701

Abstract

eUSD, the Electronic Dollar, is censorship resistant and safety-first stablecoin that brings together diversified, highly liquid backing with anti-bank run overcollateralization. Created on the Reserve Yield Protocol. Learn More about eUSD on X.

“Ugly Cash” is a financial technology platform, not a bank, that primarily focuses on enabling users to send US dollars to Latin America at no cost, essentially acting as a “digital bridge” for international money transfers, particularly targeting underserved communities and offering features like checking accounts and debit cards through a partnered bank. Learn More about Ugly Cash: Website, X.

“Sentz” is a free global payments app that allows users to send and receive money from clients and businesses around the world. The future of cross-border payments allows for instant money transfers at a fraction of a cent. For the fastest and safest way to send payments use Sentz. Learn More about Sentz: Website, X.

Problem Statement

The current RevShare proposal is working but the flywheel effect is slow moving and we have yet to see hockey stick-like growth to the upside in the eUSD Market Cap. With the current earnings from the eUSD Rev Share there is not a big enough incentive to drive adoption into eUSD from the FinTech Apps. ~50,000$/year is a lot of money, however as a business, it will be difficult to compete for the mindshare of the business with the current earnings. Increasing the RevShare to the Fin tech apps will help to kickstart that flywheel effect even more. Additionally the changes will further incentivize eUSD integrations into their business.

The Reserve ecosystem has the most voting power of any non-founder entity in the Curve DAO. The Reserve ecosystem uses this voting power to incentivize eUSD pools(and other RToken pools) on Curve and throughout DeFi on multiple Networks. However, eUSD is missing one key component and that is distribution. Distribution can take many forms, but one key to successful distribution is a central entity(or entities) to help further drive adoption outside of DeFi.

After USDC launched 6 years ago, it partnered with Coinbase, this allowed for the distribution and rapid growth of USDC. eUSD needs distribution to bring it to other individuals and businesses outside of DeFi. It is not enough to only incentivize eUSD within DeFi; it needs distribution for rapid growth, and increasing the RevShare to the Fintech Apps is one way to increase the distribution.

Rationale

Sentz and Ugly Cash are to eUSD what Coinbase is to USDC. This proposal does lower the RSR staking yield. However, if this proposal is successful, the goal is to drive growth to the eUSD market cap. With a much larger eUSD market Cap the RSR staking opportunities will be greater. In the short term we are sacrificing a small part of our individual piece of the pie, with the goal of attempting to grow that overall pie much bigger. The longer term vision of potentially greater yield opportunities is where the focus needs to be.

The overcollateralization for eUSD is currently sitting over 90%, this level of protection is quite extreme. While overcollateralization is important, eUSD governance is funding something that is overfunded. In short, overcollateralization does not need to be this high in order for eUSD to maintain its self-healing abilities.

Risks

The risk here is lowering the overcollateralization, however eUSD can afford to do this.

The other risk is that it could potentially lower the yield on eusdRSR, which can potentially drive RSR holders to stake on a different RToken. However, if this proposal drives A greater market cap, this can potentially create a higher yield which will drive RSR holders to stake or re-stake on eUSD.

• Yes, I support the FinTechs in this proposal
• No, I do not support the FinTechs in this proposal

[tacoexpert1]

Efforts to boost fintech app usage seems worth it in the long run.

[rspa_StableLab]

Thank you for these well-thought-out changes. Funding FinTech growth seems to be a great way to boost real world usage of eUSD.

[blue]

I’m an Ugly Cash giga-bull and believe it’s currently eUSD’s best chance at exponential growth.

Here’s a chart shared by Gabo showing assets under custody picking up steam-

[0xJMG]

This is a low quality proposal and should not be supported.

Start with the obvious: the poll language is misleading. Phrasing like “No, I do not support the FinTechs in this proposal” or “Yes, I support the FinTechs in this proposal” in the vote presents a false choice, as if FinTech support hinges on the outcome. In reality, they already receive revenue share—the question is whether that should change.

The proposal starts as a set of rule changes but later slides in an eUSD revenue share adjustment. These should be separate proposals, each with a clear rationale.

If anyone believes FinTechs’ revenue share is insufficient, they—or the community—should present a data supported proposal rationalizing a change. That means explaining how additional eUSD revenue share translates to TVL growth, what initiatives it funds, and what outcomes it aims to achieve, and what are the leading metrics to do so:

For example, “we aim to have $50,000 spent on YouTube content marketing targeted at remittance audiences in Mexico. We estimate $50,000 spent will drive 900,000 impressions, 9,500 leads to a home page, and 900 new users with a $20 eUSD balance or greater, or $18,000 TVL increase total. The campaign period is Q2 2025. results will be presented 30 days after campaign completion.”

A compelling proposal must connect a larger eUSD share to net TVL increases and clear benefits for RSR stakers. If the data in the proposal is backed from learnings form prior campaigns, this makes for a much stronger proposal likely to be accpeted by eusdRSR stakers.

Just as a matter of assessmnet: Since neither Sentz nor UglyCash hold significant stablecoins outside eUSD, the current eUSD TVL ceiling likely reflects their growth trajectory—not a by product of the eUSD revenue share.

This proposal dangles upside without evidence. A smarter move is investing in new FinTech partnerships to expand distribution and revenue. For example, in January 2025, IndexCoop announced eing lcose to finalizing asset integrations with MetaMask, one of the largest non-custodial wallets. To be fair, these deals aren’t simple—they require coordinated efforts in community building, education, and partnerships. This begs the questions, what’s eUSD’s strategy for community and education to bring on more Fintechs? How is the RToken Champion tackling this objective or some other more important objective?

[0xJMG]

This is very odd.

I see that rev share parameters changed for eUSD on Feb 12 but can find no supporting RFC that proposed changes were discussed in the forums.

Coupled with a lack of weekly Reserve Governance At A Glance updates, this is lining up for an increase in confusion in Reserve governance.

[0xTomSawyer]

Here’s the supporting RFC: [IP] eUSD Revenue Share Update 2025-02-06

Here’s the onchain Poll for that RFC as you stated above: Reserve Register - Reserve Protocol Interface

Both are labeled: “eUSD Revenue Share Update 2025-02-06”.

These proposals were brought on the forums and onchain by Stable Labs

I fail to understand the confusion.

[0xJMG]

Can you please point me to the text in the supporting RFC that says “we propose a rev share change from X to Y”? Thank you.

[0xTomSawyer]

Original Proposal screenshot is here:

See original proposal here:

And the update proposal in question: [IP] eUSD Revenue Share Update 2025-02-06

[Mr_Bones]

I am in agreement with 0xJMG on multiple points. We need to see supporting data, estimates and plans that this revenue share adjustment will lead to greater EUSD growth. This does need to be split out into its own proposal as it needs significant data to provide a full picture.

I am also in agreement with the need of the expansion of partnerships. We have two wonderful FinTechs, but as notated by 0xJMG, EUSD growth is limited by the companies’ overall growth trajectory. This becomes particularly salient when a road block appears like the recent El Salvador issue for Ugly Cash. Having more rods in the fire helps turn this into more of a dent in the EUSD growth curve rather than a forced plateau.

[Fernando]

I am always super positive about the growth of the fintechs, especially UglyCash.
Who is asking for this increase? Who is writing those proposals?
This needs to be more detailed. Maybe a Chart proposition if the Fintech mints $100M it gets x % of the revenue share… or if it hold a percentage of the MC it get y % of the revenue share.
Right now who is writing this proposals does not care for RSR stakers. MC has not increased for a long time. Maybe it’s time for the Rtoken champ go and try to look for places to list $eUSD !

[rspa_StableLab]

Hey Mr Bones, There’s a table in the proposal with the data and the links to debank, where you can check the balances held by these addresses.

We check these once a month as part of our mandate to operationalize the original proposal by @mattimost.

This could also be a Dune dashboard I presume. I will ask the data peeps in house if they can do that.

[rspa_StableLab]

@Fernando

or if it hold a percentage of the MC it get y % of the revenue share.

This is exactly how it is laid out.
The way the revshare is calculated and the original post legitimizing this are linked in the proposal.

The eUSD community approved these proposals because it believes this will help eUSD succeed by increasing a real world use case.

If at any point the community wants to decide otherwise we are happy to support the creation of a proposal to stop the revshare.

[Fernando]

I don’t see any chart showing how it’s going to play out, the proposal almost doubles their revenue share if the proposal passes. That is it! What I am saying is their share should only increase if minting increases.

[Smeddy]

My feedback is going to be a simple one. I do agree with most (all) of the reasons against it (James, Mr Bones, Fernando).

It is a much bigger slice than they currently get, and I do think every dollar should be accounted for, and I don’t want to see my eUSD staking rewards slashed.

But we do want to keep things competitive. Those FinTechs are backing Reserve, they could be thinking “We could hold our floats elsewhere for X% annual yield” etc. They’re both trying to find their growth, they are both the only users promoting eUSD at the moment.

For awhile (IIRC), Ugly Cash were directly injecting that money into user savings accounts to give real-time yield to their customers.

Basically my gut says “yes” - send some rope out and see if it catches. It’s not an evidenced-based position and I should side with the rational, request-for-evidence based comments above.

We are still at the experimental stage of all of this. I could raise a proposal reverting all yield to RSR stakers tomorrow if I was so minded. FinTechs are taking a chance on us, I’m okay with taking a chance on them.

Like I said, it’s a gut vote. Maybe it’s a waste of $50,000 per FinTech. Maybe that’s a conclusion we come to in six months. Maybe looking back we can see whether it was used wisely or not. If the sums were bigger I’d want more justification (right now we’re talking about what would amount to one extra salary per team).

If someone says “Your reasoning is poor”, I’d accept it - it probably is. I’m just going on my instinct for this proposal.

[rspa_StableLab]

@Fernando

I don’t see any chart showing how it’s going to play out, the proposal almost doubles their revenue share if the proposal passes. That is it! What I am saying is their share should only increase if minting increases.

Understand. At the moment it changes whenever they hold more or less eUSD on a 1:1 basis.

This proposal would change it to 2:1.

I understand if you feel this is taking too much away from eUSD stakers. Thanks for participating here in this discussion. This is what RFCs are for.

[0xJMG]

A few thoughts and concerns here:

First, @Tom_hyUSD thank you for sharing the screenshot. Usually, a “shift” is shifting revenue share between participants of a total pool, for example of a total pool of 10% (arbitrary number I picked) shared/split between three contributors.

Here are some illustrated examples:
Example 1 “equal share”:
RToken at $100M TVL, with 10% shared with 3 Fintech apps + 1 RToken Champion
2.5% to Fintech 1
2.5% to Fintech 2
2.5% to Fintech 3
2.5% to RToken Champion
10% = total shared

Example 2 “top performer share”:
RToken at $100M TVL, with 10% shared with 3 Fintech apps + 1 RToken Champion
5% to Fintech 1
1% to Fintech 2
2% to Fintech 3
2% to RToken Champion
10% = total shared

If I have misunderstood the term “shift” in the Reserve context I ask that the team clarify, because others are confused with this as well.

Also if a Fintech partner is getting 3% revshare, that scales whether TVL is $1M or $100M–its quite effective and automated. So if Fintech #3 contributes the most, they get the most.

[0xJMG]

Hey @blue the chart is quite small. Can you provide a higher definition version and “key” to reading it?

The good news with the revenue share %, is that it scales proprtionally with UglyCash’s contribution, whether they contribute $1M in TVL or $100M in TVL. Incentives alignment!

[LuisR]

I understand the different positions here, I think all are very valid points. Ultimately, what we all want is for the TVL to really scale up and the meta-point here is whether we think Fintechs are a good distribution channel worth investing on to get the job done or not. I think the answer is yes.

I’m convinced eUSD needs channels like this to trully scale. Fintechs bring organic real-world usage in a distributed way which makes adoption more sticky and more likely to tap into network effects. However, small Fintechs need to be able to aggressively compete with attractive enough value props to stand out from the big-pocket players. Thus, being able to offer high(er) than average APYs, for example, is part of the customer acquisition/retention tactics this proposal would enable. Without it, it is increasingly difficult to outgrow larger competitors.

As with any other investment, ultimately is a bet, but an educated one. The good thing is that this is not set in stone, we can learn from it over the next months to see where it take us and iterate based on that.

[rspa_StableLab]

@LuisR

As with any other investment, ultimately is a bet, but an educated one. The good thing is that this is not set in stone, we can learn from it over the next months to see where it take us and iterate based on that.

100% in agreement. This is an experiment that should be monitored over time and terminated if not successful.