[RFC] RSR Health: Request For Comments

[nevin.freeman]

Background on how I see these things:

The primary factor that will ultimately determine success or failure for Reserve and RSR holders is product-market fit for Reserve DTFs. The underlying economic engine is fueled by fees that Reserve DTF holders pay. So of course we should not be spending RSR to keep the party going as the project matures over time — RSR holders should *receive* their portion of the value captured, not have to pay any value out. That said, RSR has been and continues to be the lighter fluid we need to start and grow the fire.

The essential nature of product-market fit, which determines the fees we will ultimately earn or fail to earn, is the lens I view this all through. Which course of action will maximize the chances we grow to the size of Aave and beyond? Whatever that is, let’s do that.

RSR health is a very important piece of the puzzle.

The price of RSR determines our budget to get things off the ground until fees grow large enough. It also determines the personal financial outcome for many of us, myself included, and the better we all do, the more we want to participate and invest our efforts in the project.

What determines the price of RSR? Supply and demand. Portions of this discussion focus on supply and other portions focus on demand. On the supply side, we have the concerns about emissions. On the demand side, we have the concerns about metrics and other potential turnoffs that may prevent people out there from joining us in holding RSR. I take both seriously, and at the moment I’m especially concerned with anything that makes people who truly believe in the purpose and promise of the Reserve project nevertheless feel uncomfortable holding RSR.

Another aspect of RSR health apart from price is ownership, empowerment, and contributions by RSR holders to RTokens and the broader project. The governance power RSR affords is the way we share power in steering RTokens, and could be how we share power in steering the project. We clearly have work to do to get governance right; at best I’d say it’s vastly incomplete, and a cynic could be forgiven for saying it’s broken.

How/when to go about this discussion:

As Thomas mentioned, ABC is close to going public with an initiative they’ve been working hard on for quite some time. This initiative is not aimed at addressing RSR token dynamics, it’s aimed at getting distribution and growth for index DTFs, which has been ABC’s priority all year.

I think it’s going to be more productive to work through this discussion with that initiative visible in public, since you’ll be able to talk about (with praise or critique) the fruits of their labor in a way you can’t right now without knowing what they’ve been up to. We’ll also be able to talk about the challenges with lack of transparency from a perspective of being more on the same page about what they’ve been up to.

Unless something goes off track, they are days away from that going public, so I’ll hold off on getting into the details of this discussion until then.

In the meantime, I have two factual corrections to offer, and a question I would like more input on:

Factual corrections:

1. It’s been stated in this thread that there’s an existing unlocked RSR treasury of 20b tokens. That’s not true. That’s the number of tokens that have unlocked in the treasury category since October 2020, five years ago. A good portion of those tokens have been used along the way to get us to where we are today. If we decide to go into full transparency mode, we can publish the exact numbers along with all other relevant numbers. (Going into full transparency mode would bring about a bunch of new issues that we don’t have today, it wouldn’t be all sunshine and rainbows, but I’m very open to the idea. Let’s talk about that along with all these other proposals starting in a few days.)
2. James doesn’t think burning 30b locked RSR would lead to a price increase. For everyone here who is excited about the burn because of the idea that it would lead to a near-term price increase, I just think it’s important that you understand that James doesn’t think that’s what would happen.

Question for you guys:

@Smeddy said something that was pretty moving for me:

@Smeddy

it’s impossible nowadays to take anyone on the Reserve journey when the supply has the energy of the kind of projects you are warned to cross the street away from. It’s hard to suggest people take part without adding asterisks and caveats.

It would be helpful for me to get a complete list of the asterisks and caveats you feel you need to include. I get that this thread is substantially about addressing those and they have been alluded to, but I specifically want to know what you guys talk about with friends who ask you about Reserve to make sure I fully understand what the perceived issues are and can work to address them all comprehensively.

One final thought for now:

In reflecting on all this, I went back and re-read the blog post we published about the RSR emissions curve in August 2024. It explains the thinking that went into that plan in detail. If you want to be one of the 10-20 most engaged contributors on all of this, I recommend re-reading that post so you can have that context in mind as we discuss.

[rspa_StableLab]

@nevin.freeman

Another aspect of RSR health apart from price is ownership, empowerment, and contributions by RSR holders to RTokens and the broader project. The governance power RSR affords is the way we share power in steering RTokens, and could be how we share power in steering the project. We clearly have work to do to get governance right; at best I’d say it’s vastly incomplete, and a cynic could be forgiven for saying it’s broken.

Thank you Nevin for this thoughtful and fact-based response. We’re wide open to support the Reserve ecosystem with research, analytics and insights from our years serving many top DAOs on their governance journey.

For us as governance facilitators, the “lowest hanging fruit” is to get closer to a cross DTF governance of some kind. I put lowest into quotes because it’s actually a massive feat of collaboration, since every DTF would need to give up some yield and control to others.

At the moment it is very hard for DTF DAOs to fund meaningful initiatives and grants because their earnings aren’t big enough, or because any outflow means less staking yield to $RSR stakers, when staking is the primary demand driver for RSR.

Afaik, only eUSD has taken up the initiative and is sharing revenue with Sawyer to be an eUSD champion. Ham has contributed immensely to governance and is doing so on purely intrinsic motivations.

A cross DTF fund could help finance marketing campaigns, incentivize ambassadors or give grants to builders to grow the whole pie. We already have some really good thinking on the subject here in this thread.

We’re happy to move this further, if there’s buyin from major stakeholders and interest to make that happen.

Another, broader initiative could be a common gauge system of ve-locking RSR and voting on gauges to fund initiatives, and/or get yield from DTF, but with a common, easy interface, such as can be seen in Curve Finance, Aerodrome and Velodrome.

This would require substantial development as well.

I personally really cherish the newfound sense of urgency and the passion to improve governance. Please consider me and all of StableLab at your service when you need us.

[glock]

“ but I specifically want to know what you guys talk about with friends who ask you about Reserve to make
sure I fully understand what the perceived issues are
and can work to address them all comprehensively.”

Me: yo bro check out Reserve Protocol

Friend: opens CoinMarketCap

Friend: sees 100B supply, weekly unlocks, price flatlined

Me: so what you think?

Friend: bro… am I a joke to you?

[DeezNuts]

“but I specifically want to know what you guys talk about with friends who ask you about Reserve to make sure I fully understand what the perceived issues are and can work to address them all comprehensively.”

Before I even get to explaining DTFs, collateral diversity, or the long-term vision, the optics alone tend to kill the curiosity — at least in my experience. When I show people Reserve, the first thing they see isn’t the innovation or the economics; it’s the charts: a 100 billion total supply, a circulating amount already over half of that, and a price that’s been flat for ages.

And yeah — price absolutely attracts interest. Movement makes people curious; stagnation does the opposite. Most people don’t want to dig deeper when the first impression already looks lifeless.

To be clear, that’s not how I see Reserve — I actually believe in the long-term vision and what’s being built. But that’s the reality of how most people react when they first come across it. Perception shuts the door before substance even gets a chance to walk in.

If that first impression can be flipped — through clearer communication, visible progress, and more consistent engagement — the rest of the story would have a much easier time being heard.