Hey, I meant data moreso in what James and Fernando stated. Projections in terms of how the increased revshare will play out. That to me is key. How has the additional revshare in the past been used to encourage EUSD growth and how will the increase in revshare be used going forward by the fintechs to build that growth.
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Good callout. We are currently looking to develop a dune dashboard where we can see the development of eUSD helds vs revenue shared.
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What should be the criteria for āmonitoring over time and terminated if not successfulā or growing it if successful?
I believe we should have 9 months of rev sharing data with Ugly Cash and Sentz thus far, so it should be easy to establish a baseline.
I believe many in the community would be more supportive if the initiativeās accountability has tangible goal posts and periodic checks and reports.
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Perfect! We just discussed this.
I do believe this experiment should have:
a) a clearly defined duration and
b) a clearly defined definition of success.
Iāll leave it to the proposal author to define those.
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Iām guessing there was some behind the scenes chatter that inspired this governance proposal. What is the exact reasoning to increase the revenue share from 1x to 2x share of yield? Are these figures related to some sort of initiative for both Ugly Cash and Sentz, and both have arrived (somehow?) at the same answer? Iām kind of confused.
Is the yield going to be used to double the yield to Ugly Cash users? Or to be used to incentivize attention via influencers? Iām sure Gabo will jump in and provide some insight.
How does Sentz put this money to use? I donāt think itās unreasonable to ask or even gate revisions of the yield with progress updates. It feels both lazy and desperate (of us) not to ask these things of these fintechs. We are providing our capital to insure their userās funds. Much like an insurance company stopping in to make sure your business insurance policy is in alignment with reality, getting updates and rationalizations from Sentz and Ugly Cash is the bare minimum. eUSD has experienced a default once already. It can happen again. RSR stakers need to draw a line somewhere.
Tom, this proposal is quite sloppy and unbecoming of the RToken Champion. Iāve voiced my opinion to you more than a few times regarding the revenue share proposals. They need to be fair to both stakers and the fintechs, consistent and of a relevant periodicity. The way you construct the first part of the proposal, itās like we need to bend over backwards to appease the fintechs. These proposals seems to be getting sloppier and further away from our conversations.
- Update proposals wonāt reduce the Fintechās percentage unless the Fintechās eUSD holding have decreased by greater than 20%ā¦
No. Do the proposal based on what the balance is at the time of the proposal. This 20% rule is silly. They will have a revenue cut when their holdings change down, in step with proposal timings. Itās that simple.
Also, your logic is not sound in this point. The percentage they hold doesnāt affect their revenue amount, just percent of total revenue. If circulating supply grows, so does the total revenue generated. They are not penalized when the circulating supply increases disproportionate to their own holdings.
- Too frequent for the fintechs.
Is this real? They are reevaluating their holdings? Iām not even sure what this means. Whatever is in the wallets is what included in the revenue share. Thatās up to them. Itās just a bit of math that they arenāt doing. Iām sure an LLM can send them an email on whatever day coincides with the proposal, summing their published wallets and seeing if it jives with what is in the new proposal. Hopefully they arenāt saying itās too cumbersome to find the time to vote for these proposalsā¦
- An increase by 20%ā¦
This is reasonable.
- Flywheel effect is slow moving.
According toā¦you? Who is making this claim? Itās not clear. Are Ugly Cash and Sentz saying that a 2x revenue share will instantly solve their growth problems? If so, Iād like to hear more about why that is.
Sentz and Ugly Cash should have been timely in their reply to this thread, and itās more than just a bit odd that they didnāt have a canned update ready for when this thread went live. If Sentz and Ugly Cash are not interested in providing rationalizations to justify this proposalā¦
This proposal should not go on chain anytime soon. Very disappointed.
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Discussing this proposal as a question of ārevenue shareā is technically accurate but I think it obscures the real question here. The question is how much revenue should be allocated to paying eUSDās āequity holdersā (rsr stakers) vs. expended in the hopes of increased market share.
It seems unusual to me for an early stage project and one that he must hope / believe has most of its growth ahead of it, to prioritize paying dividends to equity holders rather than reinvesting heavily in growth.
Anyway I voted no for the reasons others have detailed that this proposal needs to be further developed with clear timelines / objectives. But in principle, we need investments like this.
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Without aspiring to repeat everything that has been said already, I would like to solely focus on this part of the proposal:
āCurrently 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.ā
And just like that, a doubling of the revshare is proposed for UglyCash and Sentz - and as a result an additional cut is proposed to the yield stakers receive in return for putting their money at risk. With the only rationale stated that the flywheel effect is slow moving. I am trying to imagine how you would get any money from any sensible investor by just saying: āGive me double the money I get now and all will be greatā. This does not take us as eUSD stakers seriously and I have a hard time accepting that both the UglyCash and Sentz leadership would ask this question without a better-explained compelling issue and a plan how the additional money would be spent. And how we can measure (or just find out) if the plan actually works.
I am extremely enthusiastic about both FinTech initiatives and I am more than happy to fund their vision given a good plan / rationale. Full disclosure: I am in it for the money, in it for the tech but also very much in it for making the world a better place.
I am in no way asking for guarantees and I also donāt need a full-fledged financial business case of course. But surely we all deserve to take ourselves and all parties involved seriously and propose/take these types of decisions on a more detailed-out plan? Voted no to the proposal.
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A very interesting thread with many well formed opinions.
We can see two camps emerging:
- In favor: This will allow Sentz and UglyCash to spend more on attracting users, which would boost eUSD TVL.
- Against: The proposal lacks specific goals, and no clear connection between eUSD yield shared with Fintechs and eUSD TVL growth has been demonstrated.
Given the amount of critical voices we recommend that @0xTomSawyer or the FinTechs that stand to benefit from this proposal address the concerns first, before moving this to the IP stage.
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Thanks Tom, this is an interesting proposal, and thanks to all for the lively discussion and excellent feedback.
Braden writes:
How does Sentz put this money to use? I donāt think itās unreasonable to ask or even gate revisions of the yield with progress updates.
Great question! I am generally reluctant to talk about products and features before they are announced. However, I think Bradenās request is very reasonable, so, here goes!
Sentz Earn is how weāre putting the RevShare to use.
Sentz Earn is a new feature for users of the Sentz app, where they can earn eUSD rewards based on eUSD held in the Sentz app. The RevShare program makes Sentz Earn scalable and sustainable.
Sentz Earn is unique in a few ways:
- Once enrolled in Sentz Earn, the main balance held in Sentz earns a percentage based (APY) reward.
- No need to segregate funds or lock them up in any way in order to earn rewards.
- Funds remain self-custodial.
- Sentz is a self-custody wallet and Sentz Earn does not change this.
- Sentz balances remains confidential (except that the user agrees to share their balances and changes to it with Sentz Global).
- For those new to Sentz (nee MobileCoin), our UTXO-based L1 blockchain has confidentiality built in, shielding source, destination, asset, and amount. Our blockchain uses several zk techniques to keep wallet contents and transaction graph private, even though the blockchain itself is decentralized and publicly published.
There are a lot of technical details in how we achieved Sentz Earn ā maintaining self-custody and confidentiality while delivering balance-based rewards is not a simple task. Iām going to save those for the curious as well as more details on the user experience and general terms of service. Stay tuned for that, or hit me up 1:1 if you are interested. I donāt want this post to turn into an infinite scroll.
Rollout Plan
Weāve been dogfooding Sentz Earn internally and with a few trusted alpha testers for the last month. Itās working great so far. By dogfooding, I mean our small cadre of testers has put their own money into Sentz and the rewards are theirs to keep.
Next, weāre going to invite waves of āearly accessā participants, starting with people who answered a survey where we tested several new feature ideas, and these people indicated that Sentz Earn was what they wanted. We expect to start this in just a few days.
What about this proposal?
Braden also wrote:
Iām guessing there was some behind the scenes chatter that inspired this governance proposal.
Actually, as far as Sentz goes, no. We were as surprised to see it as anyone. However, kudos to Tom because he wrote about some of the very things that have been our minds when trying to pick our launch APY.
Unlike the RevShare, which shares revenue well after it is earned, has significant time delays in adjusting the RevShare percentages, and is based on constantly varying rewards from the basket, we think our target audience wants a product that lets them start earning immediately upon deposit, and at a known rate that changes after the change is announced, and changes slowly over time.
We are off to a small, careful start, and as long as the numbers are small, these issues donāt pose significant problems, but we hope this program will get huge and the quicker the better. The bigger it gets, or maybe more importantly, the faster it grows, the more cash flow is going to be an issue in order to keep the program sustainable.
We appreciate 3 aspects of what Tom has proposed that will help our program to be a success in driving the eUSD TVL higher:
- Keeping each platformās RevShare from bouncing around due to large moves of eUSD outside of that platform is a welcome suggestion. We are making commitments to pay rewards out to our users and knowing that there is predictable revenue coming in to fund those rewards means we can promise more to our users.
- Recognizing that as our platformās TVL goes up, we need the RevShare to reflect this as soon as is practical, as we are promising immediate rewards to the people who are driving up that TVL.
- Increasing the percentage of the RevShare will also allow us to offer higher reward rates to our users, which in turn should cause our users to keep more of their savings as eUSD, driving overall eUSD TVL.
In summary: what do we plan to do with our RevShare? We are going to distribute it to our users via Sentz Earn.
As youāve made it to here, I just want to express my appreciation for your attention and welcome your feedback. Also, thanks so much to the eUSD governance community that has made Sentz Earn even possible in the first place.
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Iām just seeing this, hadnāt heard about it before.
On first thought Iām opposed to expanding the revshare to 2x. From what Iāve heard, the current rewards offered to Ugly Cash users are already a very successful motivator for users based on their metrics so far. Thus, I donāt think more incentive for earn programs is necessary, at least with todayās APYs in DeFi.
Also: offering a reward amount thatās too high may scare people away in a post-UST world. Current rates seem about optimal to me for someone who isnāt deep in DeFi farming stuff. A normal person getting 7% safely in todayās environment is already very sweet.
Also: Whenever youāre thinking about early growth incentives, you have to worry about your deal being too good and messing with your feedback on product-market fit. Essentially: you can focus on growth until the incentives run out, only to find you should have spent the last year working on improving the core product when all the users leave. With the current sustainable 1x revshare, this is less of a risk. (Though there is still some risk with DeFi lending APYs fluctuating in bullvs bear markets.)
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The poll has closed and this proposal will remain in the RFC state and not move forward onchain.
Feedback from several key stakeholders indicate contentment with the current ongoing RevShare proposal.
The current RevShare proposal will continue to operate as normal.
I appreciate the feedback and discussion from everyone.
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