Hello everyone, and thank you for the thoughtful comments and questions. In this response, I’ll start with the most important observations and questions and add some context along the way. To keep things clear, I’ll use a simple FAQ format to address each point.
1. What is the relationship between RSR health and price?
- RSR Health = System Function. Health reflects internal performance: governance participation, treasury allocation performance, DTF deployment quality, contributor results and retention, emissions efficiency and other metrics. These are causal inputs, the behaviors and coordination quality that eventually shape sustainable value. Like resting heart rate or blood pressure, they are leading indicators of resilience.
- RSR Price = Market Outcome. Price reflects external perception: liquidity, macro cycles, trends, and speculation. It’s a lagging and noisy signal, heavily influenced by forces outside governance, team or community control. Including it would conflate market sentiment with ecosystem function.
- The Bridge Between Them. Price can mirror health over long horizons, but short-term divergence is natural. The goal of tracking RSR Health is to manage what’s controllable so that, when macro tailwinds arrive, the system is already fit. Health precedes wealth; markets reward systems that can prove durable function under stress.
2. What could healthy RSR enable us to do:
- DTF deployers can launch more quickly and safely because the shared tech is already built, tested, and security-audited.
- Keeps DTFs neutral and resilient while cutting costs through decentralized, network-wide decision-making.
- Co-own how Reserve ecosystem capital is managed and grown openly so everyone’s effort can compound in the same direction.
- Attracts talent, institutions and partners who care about the project mission or or value prop and can trace how their efforts could benefit in the bigger picture.
- Work together smoothly, without being in one place or on payroll, turning open collaboration into a compounding flywheel
3. What are the main problems identified in this proposal?
- RSR ecosystem looks inefficient partly because unused supply distorts first-impression metrics like FDV and associated ratios (compared to peers)
- Too much control sits in company wallets with offchain decisioning, creating imbalance and hesitation from governors and builders. Since the community has no ownership in ecosystem strategy or capital allocation, they disengage or grow resentful instead of productively contributing. We are failing to optimally compound human with financial capital.
4. What are the proposed solutions, and why?
- Burn a significant part (initial estimate is ~30 billion) of the unused RSR supply to improve metrics legibility and build more trust.
- Move from an outdated fixed 100B RSR cap to a modern tail-emissions model (e.g. ETH issuance, SOL issuance, FRAX issuance) that funds growth minus the current metrics/fairness/dump-risk concerns
- Open up strategy and capital decisions to attract more talent and so the community can co-own the process and (learn how to) channel their ideas productively.
5. Can you clarify where non-circulating RSR is held in company wallets?
- Roughly 41 billion non-circulating RSR sit in company-controlled wallets (listed here, here, and here). It’s likely a few additional company wallets hold several billion more RSR, which the team or some extra onchain sleuthing could confirm.
6. What is the argument against fixed supply hard caps?
- In crypto we tend to worship hard caps but they’re super impractical. Inflation is needed to redistribute and realign incentives as things change. Even Bitcoin may face this in the next 15 years if fees can’t cover network security (background here, here and here). What communities really want is transparency and ownership, not arbitrary limits. A hard cap only reflects the social agreement at the time it was created. The 100 billion RSR meme made sense before tangible utility, benefits and data arrived, but operating projects can’t pay talent, buy hardware, fund marketing or rent services with legacy memes.
7. Why isn’t a simple RSR token burn enough to fix the problem?
- Burning tokens doesn’t fix the real issues, it just looks good superficially, and only temporarily. This proposal isn’t meant to superficially raise RSR’s price, and no one should expect that. It simply takes unused tokens out of today’s count to calm longstanding worries and improve first-impression metrics legibility. Those tokens can come back later through tail emissions if the community decides they’re needed for growth. It makes RSR look healthier and easier to understand without making premature promises.
8. Why does a tail emissions model work better than a capped supply?
- A capped supply can hold a project back because it assumes the future as a snapshot. A tail emissions model adds flexibility by allowing a small, steady stream of new tokens to fund growth, rewards, and security over time. It’s transparently managed and governed by the community, giving them a real voice in how incentives evolve. This keeps the economy healthier and more sustainable while improving how metrics are read and aligning RSR with modern systems like Ethereum and Solana.
9. Why does giving people ownership matter more than reducing supply?
- When people can see how decisions are made and have a say in them, they feel a greater part of the mission. That sense of ownership builds trust and motivation to help. It turns passive followers into active builders whose energy attracts more talent, ideas, and capital. Over time, that shared momentum can grow into something much bigger than any one team could create alone.
10. What level of active participation can we reasonably expect from RSR holders in expanded governance?
- In most crypto communities, fewer than 1% of holders actively participate, and that small group often creates the biggest benefits for everyone else. From what I’ve seen across many projects, it usually takes fewer than 20 focused, proactive contributors to noticeably improve an ecosystem’s health and direction. As an RSR holder, you’ll have the choice to join in directly or delegate your vote to someone you trust who’s putting in the work.
11. veRSR was proposed, but why choose it over regular DAO voting or another approach?
- It’s probably too early to compare veRSR, DAO voting, or other systems until there’s stronger agreement on the core problem and a willingness to act. Otherwise, we risk debating solutions before agreeing on what needs fixing. veRSR is a reasonable starting point since both the team and community already understand it a little. It’s onchain, transparent, and widely used across DeFi. Still, simpler options might offer similar benefits while fitting Reserve’s goals more closely. Once alignment is reached, parameters and scenarios should be modeled carefully with safeguards against governance capture. Other ideas like KPI-based emissions, adaptive burns, or Haskel’s DBV/DBC frameworks could also be explored as part of this evaluation.
12. For the proposed veRSR, DAO, or other model, what should it fund, and how can teams still move quickly?
- Governance should focus on a two-handful of major decisions each year, not day-to-day details. These include large expenses (like spending over $1M), emission adjustments, and strategic funding renewals. The model would direct capital to key areas such as service providers (like ABC Labs and auditors), ecosystem projects (such as Ugly Cash), top-ups to the Confusion Capital discretionary fund, liquidity programs, partnerships, and more.
- All funding proposals should include clear justification, projections, and receipts. Vendor teams would manage smaller monthly costs within their approved budgets and share summarized reports during renewals. The goal is to keep treasury management open and predictable, with only a few major checkpoints each year so governance stays effective without burning out.
- Some areas, like DTF basket changes, liquidity pool prioritization or grants, will need higher-frequency reviews within several sub-daos. If this proposal moves forward, the structure will need further detail and modeling.
13. If a token burn now and tail emissions later are being considered, how do we determine the right amounts?
- We need a better picture of how Reserve has used its capital over the past three years and what it’s likely to need over the next five. That information will help size things like the Confusion Capital discretionary fund and set parameters for tail emissions that can flex between inflationary and deflationary phases as conditions change. The goal is to design smart levers that keep the system balanced and sustainable over time.
- It’s about the same basic process any project uses: review spending, forecast needs, add a safety buffer, and align funding with the vision and traction. Later, if more capital is needed, make a new proposal and raise it.
14. How can we immediately accelerate stronger governance and improve related health issues raised in the original proposal?
- An idea is to create # delegate seats, each elected by the community twice a year. Every delegate would be given temporary voting power of __million RSR from company wallets and earn $,000 for a six-month term. They’d need to stay active in at least 70% of RSR-governed DTFs with >$ million TVL. Poor performance would mean losing the seat in the next vote. The annual budget could come from the veRSR or DAO budget, or from a share of DTF revenues. This paid delegate program would create a clear path for new contributors to earn trust and compete for future leadership roles. Anyone could also grow their own organic delegation support, which would carry weight in the semi-annual elections. Company wallets could still vote but should aim to never vote more than _% of the influence. (specific numbers left blank as placeholders)
15. How does this proposal help Reserve concentrate efforts on its unique edge?
- It’s a bit of a trick question. When I look at Reserve’s strengths, weaknesses, and what is the largest potential differentiator and hardest to copy, one thing stands out more than any other. The factor that could help DTF deployers launch faster, operate more securely and inexpensively, and make the ecosystem grow stronger is the same across all of it. Reserve’s edge is RSR health, and realizing it is the work ahead.
16. How should we measure RSR health?
- Upstream: Track participation and ownership signals, how much RSR is locked, who’s voting or delegating, how many proposals get made and approved, whether major spends show clear results, and how many new people are stepping up to help because they understand how their work pays off for everyone. Over time, the company’s share of ownership and influence should fall below 15%.
- Midstream: Optimize for DTF integrations growth and efficiency, measuring ratios like TVL per integration, TVL-to-FDV and other metrics.
- Downstream: Look at number and quality of listed assets, transaction volume, monthly active users, and protocol revenue or profit.
17. What is the expected sequencing or timeline for proposal implementation?
- Much of this depends on the company setting the pace and parameters, since progress requires company/community alignment on the core problems, solutions, overall strategy and how this fits against other priorities.
- It’s also important to acknowledge where the broader crypto market are in terms of adoption. Based on a16z’s estimate of 40–70 million onchain users, Coinbase’s Q2 report of 8.7 million active users, and Binance activity extrapolated (about 7-9x larger than Coinbase) from CoinGecko volumes coupled with Binance total reports, total monthly active crypto users are somewhere near 100 million, roughly 1.3% of the global population. This is tiny. For comparison, the internet hit 100 million monthly active users in 1997 and now is 5.6 billion (70%). While a stock market darling in the 1990s, It took Amazon till the mid 2000s to achieve sustainable product market fit.
- Crypto is still early, and most projects, including Reserve, haven’t yet achieved product-market fit. A liquidity boom cycle may lift activity and metrics temporarily, but the structural issues highlighted in this proposal could reappear even more sharply once conditions tighten again. Strengthening RSR health now, whether in a rising or falling market, prepares the ecosystem to endure and compound long term.
18. What are the benefits to each stakeholder group?
- DTF deployers: Launch faster and inexpensively on shared, secure infrastructure while staying neutral and independent, supported by a community that amplifies awareness and drives governance.
- Capital contributors (builders, partners, investors): Gain predictable funding, aligned incentives, and transparent coordination that make it easier to build, integrate, and invest with confidence.
- RSR holders: Benefit from greater transparency, stronger governance rights, and healthier fundamentals that make participation more meaningful and sustainable.
- Reserve companies (Confusion Capital / ABC Labs): Gain motivated talent and positive energy that drive faster progress, sharper feedback, and global advocacy for the Reserve brand. Decentralization brings energy from the sidelines onto the field, reinforcing a shared sense that we’re all in this together.
- Unbanked, underbanked, and everyday people: As DTFs grow and stabilize, they can expand access to reliable, inflation-resistant money for people whose savings lose value too quickly today. DTFs could offer a more stable alternative to fragile local currencies, giving communities everywhere a fairer way to save, transact, and participate in the global economy. But only if we succeed.
If you’ve made it this far, thank you for reading. I’m doing my best to move the conversation forward with the limited information and perspective I have.
Sharing your thoughtful questions, critiques, or commitment for how YOU will contribute if this proposal advances will help move everyone forward together.
And if you see something I’ve missed, especially around what is Reserve’s edge, please share it here so we can all see a little further together.