Some perspective:
Fundamentally, there are two main goals we’re here together to achieve:
- Make money (everyone involved has this motive)
- Address the problem of store of value and inflation for the world (many of us, though not all, have this motive)
I hope we can at least agree that these are the end goals, to begin from a place of alignment.
Next is the question of what’s preventing us from achieving these goals, or what could improve our progress towards them.
On this, our views are all over the place, and that’s to be expected – we’re a diverse group of people from all over the world with very different backgrounds, skillsets and ideologies, many of whom have never met in person or even over a video call. We’re discussing a decentralized project and capital structure that exists within a novel and constantly evolving worldwide cryptocurrency market, all in a single-threaded text forum. We also have a big asymmetry between people who get paid to work full time on the project and people who don’t – some of us have devoted our professional lives (and then some) to the project over the course of many years, thinking through many issues and options all the time, and others have full jobs and lives to tend to outside of Reserve, only following along as time and interest allows.
So, naturally, this thread is full of all kinds of different ideas and perspectives. I do my best to understand what each person says, try to figure out whether they are right about their interpretation or suggested course of action (doing my best to ignore personal attacks since someone can be having a bad day and say mean things and still be right about their critique or proposal), and then support the ones I agree with.
How I think this discussion should go:
This thread isn’t a simple single proposal, it’s an upwelling of discontent over several categories of concerns and issues with multiple different proposed plans.
Step one is airing the concerns. We’re making good progress. I asked about the caveats and asterisks in order to bring out more of the concerns that may have otherwise gone unstated. I’ll share my distillation of concerns below.
Step two is discussing the concerns. It won’t be possible to come to full agreement on the concerns, so we shouldn’t try, but we can still learn from each other and even if we don’t all agree it’s helpful to understand each other’s views so we can negotiate on what to do.
Step three is discussing potential courses of action. Many suggestions have already been made, but there are more possibilities to add and some ideas can be eliminated through discussion in order to get a working list of options we can tell are really on the table.
Step four is baking overall proposals until one “passes.” Once we have a working menu of live options, we can bake overall proposals. This is what James came out and did to start this conversation, but we need to take more stock of concerns and potential courses of action before we’re really ready to bake something real. In congress, bills get introduced symbolically to start a discussion all the time, and while they don’t pass in their initial form, they can lead to other bills later that make big things happen. I see James’s proposal as a symbolic bill that ignited a useful discussion. It’s not yet the true one big beautiful bill to make RSR great again, but it raises the question of what that ought to be. As James said:
And so it is. Please join me in keeping things civil so we can get something done together.
As for what I mean by “passes,” we obviously don’t (yet!) have an established decentralized governance mechanism here for many of the courses of actions being proposed. For this process, “passing” means getting agreement from whichever parties need to act in order to bring about a proposed set of changes. This will likely include Confusion Capital since it’s the owner of the locked RSR (held under the cryptographic restrictions of the slow and slower wallet, promised to be withdrawn on the published emissions curve), and may include ABC, BFF, and many other RSR holders depending on what we end up doing.
Distilling and discussing our concerns:
Here are my thoughts on the big concerns brought up so far:
(1) Governance and transparency of how emitted RSR is used
As of today, all remaining locked RSR is held by Confusion Capital, and over the course of time it is unlocked. That means that Confusion Capital is the sole decision maker on how that Treasury RSR gets used. Currently, it’s very opaque. Although we’ve made a few general explanations of how we use RSR, we don’t publish any sort of ongoing reports, nor do we solicit input on how to allocate it. It’s pretty obvious why that is a problem. If you don’t trust me and the Confusion Capital team to make good decisions about how that RSR is used, then you have no way to audit whether we’re making bad decisions and no way to stop us from doing so. I honestly am very sympathetic to that concern and I’m prepared to work together to figure out a much better setup.
For the record, back in August 2024, when we instigated the bitcoin-shaped emissions curve, I posted on this forum soliciting input to try to figure out the right allocation mechanism for those tokens as they unlock and got virtually zero engagement. At the time, we just got busy with other things and since it seemed like nobody had any opinion on what to do, we just kept the status quo. But I want to point people to that thread in case they hadn’t seen it just to make clear that this is always something that I’ve wanted to make progress on, and I am more than happy to engage.
Here’s some very basic info on CC’s RSR treasury operations to start:
- In 2024, Confusion Capital sold 822m RSR for $15.8m at an average price of $0.0192 and purchased 1.08b RSR for $5m at an average price of 0.0046. So on net, we subtracted 259m RSR from circulation through treasury operations.
- In 2025 (year to date), Confusion Capital has sold 335m RSR for $4.3m at an average price of $0.0129/RSR. We have also bought 704m RSR for $3.9m at an average price of $0.0055. So on net, we have also subtracted 370m total RSR from circulation in 2025 through treasury operations.
- RSR has also been paid to team members and used as incentives within UGLYCASH and in DeFi to encourage use of Reserve DTFs. However, after seeing farmers dump RSR, we’ve long ago switched to paying for DeFi incentives in the DTF tokens we purchase with cash, so the total amount of RSR dolled out in incentives in 2025 has been pretty small.
(2) Spending capital in ways that don’t benefit Reserve/RSR
I want to explicitly call out and give voice to the fact that I see people being concerned that RSR or other project capital is spent in ways that doesn’t benefit reserve or RSR holders. I think it’s fair to have that concern given the lack of transparency.
For now I will go ahead and state for the record that from my perspective, Confusion Capital has always deployed RSR and any capital that comes from the sale of RSR in a way that we feel is beneficial to Reserve and RSR holders. That’s not to say that we’ve always made the best decisions in every case, but I can say that when we compensate project contributors, we do our best to pay reasonable market rates, and when we’re deciding what to spend money on, we are not funding things that are unrelated to what Reserve is trying to do. We sometimes allocate capital to investment funds that are unrelated to Reserve or even to crypto, but the point of those is to maintain and grow the treasury so that more capital is available for the project.
I don’t expect you to trust me, and you shouldn’t need to, so I’m open to figuring out the right approach to transparency and accountability.
(3) The RSR emissions schedule – speed and comparison to BTC
I am aware of several concerns here:
- RSR supply is growing too fast and the tokens coming out are depressing the price.
- Confusion Capital is accumulating RSR, so there’s a risk it could sell in the future, and that’s scaring people away.
- The comparison to Bitcoin made no sense and it puts people off for us to try to base it off of Bitcoin since it feels like such a different situation.
As noted above, the CC treasury was a net buyer of RSR in 2024 and so far in 2025, though it did distribute RSR in other ways. So the reality is much more in inline with worry #2 than #1. The fact that RSR did not steadily go up in price this year was, in my opinion, a result of demand not growing, not a function of the treasury tokens being dumped.
But #2 is a real concern. I agree with this concern. Even if we had been 100% transparent and it had been more clear what was happening to every token, it’s not a good situation for people out there who have no reason to trust us to see tokens accumulating unlocked and worry that we could dump them all at once. (Those who know and trust us know that we wouldn’t do that, but that’s not the point. Most people don’t know and trust us and I get that. Can’t be evil > don’t be evil.)
Let’s look at how we got here for context:
In August 2024, we set RSR emissions to pick up at the same speed as BTC’s emissions from when it was at the equivalent portion emitted. This meant that in 2025, 8.4% of total supply would unlock, which meant a 15.63% expansion to circulating supply. Looking ahead, that emissions rate would mean 6.90% of total supply would unlock in 2026, representing an 11.06% expansion to circulating supply.
Before it had been set, we had no pre-planned schedule. As I’m sure you know if you’re reading this post, we thought pretty deeply about our emissions rate for the second half of the supply. In addition to lots of discussions on the forum, we also had an in-person discussion on what to do at Monetarium 1 that was exclusive to RSR holders. @Braden asked above why we never published the videos, it’s because we didn’t take videos of those sessions, they were off the record in order to encourage everyone to speak freely.
During that in-person discussion, I shared that the Bitcoin curve was an inspiration for the rate that I thought could make sense given that the Bitcoin demand had increased faster than the supply. My perspective was: it’s on us as a project to increase the demand faster than supply in the way that Bitcoin did. I had planned to spend a significantly longer time deliberating with the community on the details, but I was convinced by @0xJMG in that meeting to move the process along faster and simply go with the Bitcoin curve because his perspective at the time was that the community needed certainty on a plan and that reaching certainty quickly was more important than continued deliberation to make micro adjustments to that plan.
For months after announcing that plan, the ABC Labs engineering team waited for me and Confusion Capital to complete some final analysis before hard coding the emissions contract. By the time we had made up our minds on final details, the team was hard at work on the Reserve Index Protocol. Even post launch, they’ve been hard at work shipping improvements to the contracts and the functionality on app.reserve.org. Looking back, it was a mistake not to take time to hard code the emissions contract late last year or early this year, and I own that mistake. At the time it seemed like it would not make much difference and the real progress on the core product seemed more important, but I stand corrected. I expected people to trust us to keep our word or to not care, and it seems that was not quite right.
I think the arguments made for the Bitcoin analogy being wrong are often misguided. James, you said: “RSR’s manually managed emission curve mirrors Bitcoin’s predictability in form but misses its onchain transparency, adaptability, and proof-of-work distribution in substance.” Re transparency, I own the mistake of not prioritizing the hard coding and I accept that critique. But what is meant by adaptability? Bitcoin’s curve is powerful precisely because it is not adaptable to anything. And how does proof of work have anything to do with it? Are you saying that if Bitcoin were proof of stake the emissions rate would need to be different? To me, what matters for an emissions curve to be successful is demand growing faster than supply on average. That happened with Bitcoin, and that’s what matters, not any form of adaptability or the fact that it uses proof of work mining. Is this just a phrase an LLM came up with or do you really believe these things? I see the proof of work point made over and over again, it’s not just James. Can someone help me get it?
The distaste for the Bitcoin analogy is, in my opinion, mostly downstream of people being unhappy about the price. If demand for RSR had grown this year and the price were up, people would be complementing us on the genius move to emulate Bitcoin. James was literally the one who encouraged me to go forward with that plan instead of thinking about it any further and now is stating it was wrong and should be done away with. If it sounds like I’m a little annoyed… well, I am! Own it James! Maybe we didn’t make the best choice, but we agreed at the time that it seemed like the way to go. Anyway, at the end of the day, if an analogy rubs enough people the wrong way, that itself is a problem and I’m not attached to keeping it. I picked it in part because I thought it would be a good meme, and at least in a time of low demand, it was a bad meme.
I am open to revisiting the approach to emissions, so long as we never violate any promise we’ve made about it, i.e. RSR can’t ever come out faster than that curve. I also have many opinions about this topic that I will still bring to the table when considering directions. Sharing more about how RSR is used will contribute to that public discussion. I think some of the ideas RSR holders have proposed in this thread and back in the original thread on the topic are clever and interesting and I look forward to the step of discussing them.
(4) RSR’s 100b supply is a scary number and leads to an inflated FDV
Fully diluted valuation (FDV) is calculated by multiplying the total token supply by current price. The concern here is that FDV is used by many to judge whether the current valuation of the project is reasonable or not by comparing the FDV to other token valuations, and that the comparison is unfair and unreasonable for some reason.
RSR’s FDV is currently 1.6x the circulating market cap according to CMC, so it’s a 60% higher number than circulating market cap.
Thus, the very basic concern is: If people just saw the market cap, they would think RSR is reasonably valued and buy it, but when they see the 60% higher number, that’s too high for them and scares them away.
I don’t really buy this. 60% higher is not that huge of a difference, all things considered. If someone is considering the Reserve project as a long-term economic opportunity, they are likely thinking about the possibility it could 20-200x.
But also, to the extent that the FDV does deter someone, I think that’s not a bad thing. The 60% increase is a transparent commitment to the max eventual dilution, which helps people reason about what they are getting into. We’ve discussed how transparency is good and “can’t be evil > don’t be evil,” and I think that applies here too. FRAX was pointed out as a token that got rid of its cap and became mintable. If I were considering buying it, that would introduce uncertainty and require me to trust whatever process or governing body controlled that mintability, which I wouldn’t like.
When RSR price went to ATH, the FDV was about 10x the circulating supply and that didn’t deter people. It would have actually been better for many RSR holders if that had deterred people so they would have bought at a more reasonable price for the token early in its life. To the extent that the market has evolved to take FDV into account, I think that’s healthy and will led to more rational trading of RSR. Though to be perfectly honest, I don’t think it’s evolved all that much, and I think price momentum is still a much bigger factor in causing people to buy or sell in large numbers.
When people talk about potentially burning 30b RSR and making RSR mintable in order to still be able to fund ecosystem activities, I find the mintable RSR idea unattractive and I believe many others out there will too. It may be the current meta in a few circles, but I think it’s a bad fundamental fact and would hurt us a lot over time. James pointed out that Bitcoin may have to break its 21 million coin promise since transaction fees are so low. If that happens, I think Bitcoin may be hosed.
By the way: RSR is an immutable token that can only be burned, not minted, and there is no admin control or ability to change it. So any change of this type would come in the form of a hard fork – a brand new token that we collectively decided to treat as the real RSR, where the old one would go on existing forever as well.
I will never support a fork of RSR that eliminates the 100b hard supply cap, as I have described RSR that way for years to hundreds of thousands of people and from my perspective that would be going back on a sacred promise.
Thus, I will only support any proposal that involves burning tokens if it retains the 100b max supply. This means that any burn is giving up the ability to emit those tokens forever on into the future. Perhaps some amount of burn of treasury tokens could make sense as a part of some plans. But if we do that in a plan I support, we’d need to be comfortable with never getting those tokens back, unlike the no-max-supply approach James has floated here.
Another angle on all of this is that the denomination of 100 billion it itself a problem. It sounds to me from what a few folks have said that tokens with a huge number of units have gotten a bad rap over the years. Is that right? I’d like more input on this question, so if you have a story of how people think about the number of tokens please share.
I think it may cut both ways:
On the one hand, tokens with a denomination too small start to feel “too expensive” quickly and that deters people. Many people out there feel like they can’t buy BTC because it’s too expensive, and some even think you have to buy a whole coin at a time (a holdover from how stock markets traditionally work), though I think we’re making progress in explaining divisibility to the world.
On the other hand, it is a little odd to have a token be worth less than one cent for so long, and I can see the high number of tokens seeming weird.
But then on the first hand again, XRP has 100b supply and has done just fine. So yeah, I don’t know, I can see this going both ways. Again, I think price momentum trumps all here and this factor likely doesn’t dominate.
That said, I would be open to proposals that included re-denominating RSR or renaming RSR. But again, that would have to come in the form of a hard fork which would be messy and cumbersome, so we’d need to really believe it was worth all the costs.
(5) Governance concentration on RTokens
The concern here is that ABC and other companies that participate in the Reserve ecosystem dominate governance decisions on RTokens. It’s a reasonable concern.
ABC limits its RSR stake on any RToken to 20%, however that still can give it a large vote relative to the average staker/vote locker. And with two companies voting together it becomes hard to rally people to vote against them.
I think the obvious path for immediate improvement here is to delegate company RSR to community members and let them vote with it instead. There’s been some discussion of doing this in the past, but like other things surfaced in this thread, it hasn’t happened due to not seeming high priority relative to other initiatives aimed at getting PMF and growth of RTokens. In fact, ABC explicitly decided to aim for progress on growth over progress on decentralization for 2025.
But yeah, I see the concern and I am open to making progress here. In addition to that immediate solution, more experimentation with governance is in order. I’m personally excited to have identity systems that allow for one person one vote, which can replace or be combined with token weighting in interesting ways.
(6) RSR holders disengaging instead of contributing
This one seems complicated. There’s a lot that could be said about past efforts, but I think a forward-looking lens will be better for discussion.
Going forward, I think we should engage the whole community of RSR holders to personally introduce DTFs to their friends and family whenever they ask which crypto to buy, then report back on whether a DTF turned out to be the right fit for them or not. I think these in-person interactions could be the best initial marketing approach for DTFs because they will give us a rich understanding of how they need to change if they are not landing with the target audience. Likewise, if RSR holders found themselves not feeling inclined to offer DTFs to friends and family, sharing why would also be productive, so we can take the issues into account and work toward products that we’d be excited to share. I think we should do this marketing and feedback approach with everyone within the companies working on Reserve as well as RSR holders who are not paid to work on the project but would like to contribute to move us to the next level.
I propose that we take this as the top near-term goal for RSR holder contribution and organize ourselves to make it happen. In trying to do so, we will have to work out whatever barriers stand in the way (coordination logistics, incentives, communication, commons problems, compensation/recognition, etc).
(7) The price of RSR is lower than we want it to be
This one’s complicated too. There are so many reasons to want the price to be one thing or another.
- For past buyers, of course they want the price to be higher than their entry price, and for their sake and for the present health of the community, so do I.
- For new buyers, of course they want their entry price to be low or at least fair, and for their sake and the future health of the community, so do I.
- For the project treasury, of course we want the price to be high enough that we can fund ecosystem efforts. Though it is possible for project treasuries to have too much value and thus too much slack, leading to lack of focus and potentially worse performance than had they had less.
And then there’s momentum of price. In crypto, if price is not going up, it’s going down, since people want to see gains and will get bored and leave if they are not seeing them.
And then there’s the fundamental question of what the reasonable price is at any given point. Perhaps the ideal would be if the market price matched the rational valuation at any given point in time. And since it doesn’t, we have to contend with what to do when it’s overpriced or underpriced.
My ideal would be for market price to match rational valuation at all times, such that it moons if and when the project really succeeds. My personal financial ambition is to become a billionaire in a good way, i.e. Reserve succeeds in a very big way and only then does RSR do very well and so do I.
In any case, I’d like it to be a bit higher than it is right now too. From the treasury perspective, we had intended to do more sales this past year in order to add cash to our runway, but didn’t feel that was appropriate at most price levels we saw in that time period, hence the net buying.
(8) RSR’s optics scaring away potential new entrants to Reserve
Many issues with optics have been pointed out:
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Price history
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100B supply, emissions of tokens
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Lack of clarity on what happens with emitted tokens
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Centralized allocation of emitted tokens
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Lack of visible support from seed investors
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Bitcoin comparison
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Shifting narratives over time
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Pulling out of Venezuela
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FDV
I put price history at number one because the way it was mentioned in the replies I got on this topic felt like it was the most important to people. I agree that if I knew nothing about the project and just pulled up the price chart I would take it as a pretty bad sign.
Of course there isn’t anything we can do about the history at this point. But we should keep in mind that a bad past chart doesn’t stop a coin from gaining interest if the market starts to have reasons to pay attention to it other than price momentum.
ZEC had an ugly chart:
Until suddenly it didn’t:
Obviously something other than the past price action got people interested. A past ugly chart is not the end for a cryptoasset.
I believe true traction and growth in DTF usage is the way. If it’s really happening, I think the past price history will not stop people from joining us on our journey.
(9) Reserve being forgotten/passed over by the rest of crypto
Legit concern. Same as above, I think the way out is through real traction.
(10) Reserve leadership being unwilling to seek attention for the project
We are ready to seek attention for the project.
(11) Me being a bad leader / not caring / giving up / being corrupt etc.
I care, I have not given up, and I am not corrupt. In the end we’ll be able to judge whether I was a good leader. Until then you’re stuck with me, so let’s make friends and get shit done.
(12) How Reserve will beat out competition
Right now we need to get PMF ahead of the others. Nobody in the index sector really has it yet, much of the TVL is incentivized, Reserve included.
This relies on execution by ABC, but as I mentioned above I think the time is right for RSR holders to join in on the key engine of progress: we need to sell DTFs to our friends and family, or if we can’t or don’t want to, grapple with why that is and improve them until we want to and can because they are great products. This is something a broad community can do way better than a handful of people at a small company if we coordinate properly. Once we have PMF, broader mass marketing campaigns will be more effective than they are right now.
Over time, the roles of the companies and diversity of RSR holders involved will shift as we go through phases.
Overall, we need to collectively out-execute the competition on distribution, brand, marketing, decentralized governance, neutrality, and ethicality.
(13) Getting true product-market fit for Reserve DTFs
As I’ve stated this is my number one concern and priority above all else. True growth in organic usage solves many of the problems we’re talking about here and is the fundamental engine that powers the system. It brings in fees, brings in attention, shows us what to focus on, incentivizes more participation in governance, raises the stakes and forces thought on how to improve governance, brings in more DTF creators to create more DTFs and grows our brand and network effect, prompts more integrations and listings to improve distribution, likely does well for RSR and thus improves spirits and access to capital for the treasury, gets our name out there in crypto in a positive, refreshed light, and so on.
Not getting true product market fit does the opposite.
You may argue that XRP went the route of mooning first and figuring out the product later. They are still figuring out the product and may die a very painful death of failed product meme. It’s a morally treacherous position they are in and I hope they can figure it out, but I don’t think it’s the way.
I think the way is improving the core products and the brand, narrative and reach in lockstep, so we grow the movement and validate that it’s real at the same time.
Do you have something to add or debate? Did I miss something?
We are in step 2: discussing the concerns. Please discuss what I’ve put forward, point out where you think I’m wrong or missing something, and if you agree with me please express that so we can tell who is on the same page and who’s not.
Timing for next steps:
The announcement of the project ABC is working on is currently scheduled for next week and the ABC team is working with partners to make sure things are ready. Thomas said if we weren’t live by the 14th we’d start the conversation anyway, so I’m keeping that promise with this post, and once their announcement comes out that effort will be a background fact as part of this discussion. Please join me in cheering for Reserve on the day of the announcement, it will be an exciting DTF launch with new partners worthy of celebration!