Good morning.
Related to RSR health discussion, the recent posts from Reserve ecosystem veterans 0xd15co, Ham, and Blue stood out. I encourage everyone to review them and ask questions as Confusion Capital / ABC Labs prepares to unveil an updated approach.
This is the ripe window to engage in discourse now. Six months from, the path chosen is probably in motion, yet still needing runway to prove we chose well.
But first, I want to return to the problems named in the original RSR health RFC so we are on same page, without drifting into tangents.
After two months of forum discussion, and seeing where my original framing caused confusion, it feels timely to restate the problems as clearly and succinctly as possible.
1. Metrics legibility.
RSR’s large idle supply distorts first-impression ratios like TVL/FDV that institutions and builders use to allocate capital. “You don’t get a second chance to make a first impression.”
For Warren Buffett-style allocators, RSR does not immediately register as a “value” without deeper analysis and connecting the dots. Unfortunately, these allocators’ opportunity supply exceeds demand - it’s a buyers market. But what if RSR can meet them where they are, or at least half way?
2. Shared ownership.
RSR remains concentrated in centrally controlled wallets, creating perceived dump risk for institutions and builders allocating scarce capital. Predictably, they gravitate toward alternatives that appear safer and more credibly distributed.
Governance also reads as centralized, to the point that some governors disengaged or unstaked from specific RToken/DTF contexts. Emissions fund multiple investments without holder voice or clear visibility into size, purpose, or ROI. The emissions narrative echoes Bitcoin’s meme, but lacks Bitcoin’s trust-minimized and granular transparency.
The downstream cost is steep. The ecosystem underutilizes a core web3 principle: community as capital. Without shared ownership, the compounding flywheel of building, challenging, governing, and promoting never fully spins.
In the original RSR Health RFC, you can see the initial problem statements, admittedly clumsily framed, alongside early solution sketches.
Thorough expansion included across subsequent posts:
- Post 2 FAQs
- Post 3 on Reserve’s edge
- Post 4 with follow-up observations
- Post 5 deeper dive into ownership
I will skip restating the proposed solutions since they are easy to find in the links above. The original intent of this RFC was to invite a collaborative, rigorous debate on both problems and paths forward.
Given CC and ABC Labs’ depth of insight, data access, and talent, I expect their formal response around Christmas to be the most comprehensive. I am looking forward to engaging with it.
For now, back to 0xd15co, Ham, and Blue recent and thoughtful posts.
First up, 0xd15co went deeper on veRSR and the Reserve Fund, filling gaps where my post was intentionally light. Thank you, 0xd15co.
0xd15co notes that “RSR lacks a strong long-term alignment mechanism.” This is a big deal and I’m glad he put emphasis on ”long term alignment.”
Roughly 4% of the 100B RSR supply is staked across RTokens and DTFs, typically with unstaking windows of 14 days or less. Only a small fraction of stakers participate in governance or delegate meaningfully. The behavior skews toward short-term, “what’s in it for me” incentives, rather than long-horizon ecosystem compounding.
Here are a few illustrative comparisons from a quick survey across FX Protocol, Curve Finance, and Frax:
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FXN: Over 60% of circulating supply is locked as veFXN for 3+ years, with more than 50% of vePower actively voting.
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CRV: Over 30% of circulating supply is locked as veCRV for 3+ years, with more than 40% of vePower voting.
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FXS: Over 50% of circulating FXS is locked as veFXS for 1+ year. Notably, governance is shifting from FXS on mainnet toward FRAX on Fraxtal, which likely depresses these observed figures.
While these ecosystems are far from perfect and have their own challenges, this approach displaces unserious hype and negative shitposting with a ferocious, shared ownership, qualified product improvement feedback loop.
One additional concern with 0xd15co’s Reserve Fund and governance framing is scope. Oversight appears limited to the RSR treasury, while CC and ABC control an estimated $10–20M in stable assets across onchain and offchain venues. A veRSR-governed Reserve Fund should, have full transparency into these capital movements.
If you have not reviewed or commented on 0xd15co’s post, I encourage you to do so. See link above.
Another superb breakdown and set of recommendations, this time from Ham. I will not rehash his asterisks and caveats and Path Forward, but they are essential reading and worth reviewing via the link.
I do want to push back on one point. Ham suggests that “metric legibility and protocol dump risk” are not high priorities (at least to him). I respectfully disagree.
When you examine the comments across this RFC, the most pervasive concern by far is the 100B supply. It’s a surface-level fixation, but it actually also mistakes the fever for the disease.
Improving metric legibility and reducing perception of dump risk are structural to RSR health. Idle tokens create latent sell pressure and muddy metrics. Removing them clarifies ownership, tightens incentive alignment, and improves legibility. As long as RSR is healthy, a veRSR governed tail-emissions can fund investments and growth. Price may respond, or it may not. System health improves either way.
This reflects what I’ve seen investing across crypto since 2017, including firsthand work with RSR investors at Reserve from 2022 to 2024.
Suggestion: On questions like this, high signal beats high volume. Open surveys amplify low-information bias. The responsible next step is structured feedback from qualified allocators and builders, shared transparently with the community.
If you have not reviewed or commented on Ham’s post, I encourage you to do so. See link above.
Lastly, I want to comment on Blue’s recent detailed post. It has been encouraging to see the Reserve community surface thoughtful ideas, refinements, and critiques of my original RFC. That engagement is exactly the point.
Similar to 0xd15co’s post, Blue emphasizes giving “ RSR the strongest long-term narrative.”
Whatever path we choose, my hope is that RSR sits at the center of a growth loop built on immutable, compounding mechanisms over years, not days. Blue points toward promising ideas, such as letting holders lock RSR in exchange for emissions that otherwise would have been burned, explicitly rewarding long-term alignment.
One place I disagree with Blue is the claim that “burning is a weak meme.” Two things to say about this: First, burning is a powerful meme, as a quick scan of X, Reddit, or Google makes abundantly clear its an attention flashpoint. Second, memes are shortlived by nature. Memes rarely last.
No one cares that Ethereum began as proof of work, was slow, expensive, and pitched as the “world computer.” What matters now is that it’s seen as digital oil, ultrasound money, and the leading chain for stablecoins, settlement and tokenization.
As a reminder, roughly 98% of the world does not transact onchain monthly. Legacy memes have already had their chance and likely will not onboard them. Today and tomorrow’s utility and value (and related memes) are our best shot.
Present and future RSR Health should be the priority, not what happened last year or 5 years ago.
I also want to highlight Blue’s Field Notes on public optics, the power of Ranger as an identity, and the resulting inbound interest. As I have argued a bit, improving metric legibility and reducing perceived dump risk directly reinforce these dynamics.
One final point from Blue’s post is the goal of cementing “RSR as a leader among peers.” It is easy to lose sight of this while focused on day-to-day execution, but this is a competitive arena. Institutional capital and builders have choices. They care less about what we think and more about what the RSR ecosystem enables them to do.
We need to stay in a customer mindset and frame everything around what value it delivers to them.
Throughout this RFC, we have talked about different structural RSR health issues.
The main argument I’ve tried to make is LEVERAGE. Not the kind of risky leverage often discussed in crypto, but rather the kind of leverage built by world class institutions and ecosystems.
I believe Reserve’s edge can be allowing anyone to launch onchain indexes faster, safer, at lower cost, and with credible neutrality, amplified on Day1 by a built-in community of thousands testing, governing, and spreading the word. RSR is the engine. But this only works if the incentives and support are healthily aligned.
Looking forward to the formal response from Confusion Capital and ABC Labs.