[RFC] RSR Health: Request For Comments

Governance & Research
151

1.) Regarding the burn: I was initially against a burn, but I’ve changed my opinion after giving it more thought. It is likely true that a burn won’t affect the price much (if at all), but I do think it’s more about sending a signal. We are not where we all had hoped we would be in terms of PMF and adoption of the protocol, and we see many once very loyal community members leaving or losing hope. Extraordinary circumstances require extraordinary responses, and I would say we’ve arrived at such a point. Burning RSR would be such a response.

2.) Unlocking RSR: One of the community’s main concerns is the supply (both circulating and total). While I personally trust ABC Labs to not dump their RSR in an irresponsible way, I also understand that trust should not be required in a space that offers “trustless” infrastructure. The slow and slower wallets alone hold around 35% of the total supply and could, at least in theory, be unlocked at any given time by the team (I think the slow wallet has a relatively short unlock period of 4 weeks). Moving this RSR to contracts that verifiably prevent any dump would address these concerns. It was obviously planned to do that by implementing the Bitcoin emissions approach in the form of a contract, but I think we would need to go even further. Which brings me to my next point.

3.) Governance: So if a considerable amount of RSR were to be locked, how would ABC Labs and others be funded? It would require a governance system that is used to allocate said funds. I really like Nevin’s idea of using a milestone-based approach, but letting RSR holders vote based on their amount of tokens bears the risk of whales manipulating outcomes—and ABC Labs is one of the largest holders of RSR. So that might be a good point to think about a lightweight version of the veRSR governance approach that I’ve proposed in this RFC, where long-term commitment is rewarded with increased voting power (more veRSR). RSR holders would have to vote-lock their RSR in exchange for veRSR; the longer the timeframe, the more voting power they would get. One would have to choose between short-term liquidity (no vote-locking or only over a short timeframe) and more veRSR, where veRSR could boost your rewards by redirecting some of the protocol’s fees towards veRSR holders or, later, DTFs, liquidity pools, and others. But I think a simplified version of this—without any integration into DTFs—could be a good starting point.

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152

That’s fantastic to hear. I just wanted to point out that burns can be very neutral on price and still have a gigantic opportunity cost. The devil is very much in the detail.

My callout is to throughly research the topic and come up with a clear, understandable and easy to communicate plan on why RSR choses which path forward.

@0xJMG idea of burning tokens but then emitting them again as a function of profit is an option for instance.

Protocol Owned Liquidity is another option. Here pairs with DTFs could be really interesting.

Even burns come in a wide variety of flavors.

Measure thrice, cut once.

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153

I’m scheduling our first video call discussion for: this Friday the 23rd, 10:30am-12:00pm Pacific time.

You can join here: https://ro.am/r/#/d/fK3Md5ouRryljecug9fLJw/b5SUOT8bi2xP81WHEP2nvw

  • No lurking – everyone joining must have cameras on and be willing to participate in the discussion.
  • Keep things constructive – criticism and dissent is fine, but discussion must be kept civil or you will not be invited back to future calls.

Looking forward to having some face to face time to discuss ideas, answer questions, etc. See you there!

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154

  1. Community Concerns Following the Recent Call and a Proposal

  2. Dear Nevin,

  3. Following the community call held few days ago, dissatisfaction among holders has not subsided; rather, it appears to be growing. In particular, a recent post by Chihiro, who runs the RSR $Holder Hub on X, has carried significant weight within the community. His message has deeply disappointed many long-term holders who had continued to support the project largely based on his perspective. As a result, voices of anxiety and frustration are becoming increasingly noticeable across various RSR communities.

  4. While we appreciate your explanation during the call regarding the decision to halt the token unlock, many holders perceive this situation differently. From their point of view, this decision raises questions about whether there may have been a fundamental flaw in the initial token design. Although a token unlock can be interpreted as a positive event, it can also be seen conversely as a signal that the DTF initiative may not be progressing as smoothly or successfully as originally planned.

  5. With that context, I would like to make a straightforward proposal. Specifically, we ask that the team seriously consider putting the burn of 30 billion RSR tokens to a community vote. This would not only address supply concerns, but more importantly, send a clear and concrete message that the project is willing to take decisive action to restore trust among its holders.

  6. If such a measure is not feasible at this time, we respectfully request that the team consider implementing an immediate initiative—such as an event, incentive, or tangible form of support—for the many holders who are currently feeling disappointed. At this stage, what the community needs most is visible action that demonstrates commitment, accountability, and alignment with long-term holders.

  7. Thank you for taking the time to read this message. We sincerely hope that the concerns and expectations of the community will be carefully considered.

  8. Kind regards,

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155

As I am based in Asia, I am not able to participate during any community or call discussions as they are in the middle of my night…

I have been chatting with Max and Ivan (both of Reserve team) as part of the user-feedback, and just finished writing feedback to Ivan and realized I prefer it to be seen on the forum as well.

It started around a conversation regarding CMC20, but as that is not related to this topic, please read those thoughts here.

A major concern which is holding me back at the moment to invest heavily into DTFs is the clear community vs team rift that is ongoing. Nevin and the team seem to be aware, but as a newcomer in the community, there are clear trust issues and accountability issues. I have seen plenty defeatism within communities during my 12 years in crypto, and this project currently has a lot of it within the ranks.
Big changes have to happen towards empowering community members, following the footsteps of many DeFi projects that have been able to create some working balance between shipping and a division of power. RSR has existed too long to still be in this kind of a centralized top down structure. It looks bad.
For someone to ‘set-and-forget’ their wealth into a CMC20 index, the underlying protocol has to be healthy and balanced. I know the team has runway, that is good. I know its been around for a long time, that is good too. But RSR is a gov token and Reserve is centralized and permissioned. That is bad.

My suggestions:

  1. Build out a permissionless Index Launching model with a separate tab for the (hopefully) 100s of small cap indexes being launched by users. And let the ones who gain over 100k TVL graduate to the main tabs.
  2. Initiate a delegate program for voted delegates who help steward the DTFs, thereby making votes and rebalances happen within 1-2 days, not 1-4. And giving it more address vote diversity compared to now.
  3. the team has years of runway, and an insane amount of treasury allocation. This overhang is bad for investor sentiment. If it would be burned outright, as I have seen many proposals suggest, the deflationary sink of burning RSR alongside usage of DTFs would start to become meaningful, creating a more attractive RSR token (mainly optical, but sadly just how investors work..)

Also, personally would have loved a Solana deployment. Would chose Solana over (semi) centralized BNB and centralized L2 Base any time. Also Wormhole has loads of wrapped tokens, so that would help the DTFs there, although this would create centralization risk again, but that would be up to the users who create DTFs.
Plus it would allow for the recent PreStock and xStock waves to be included within DTFs. A major new narrative which should not be underestimated.

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156

Very good thoughts. I like all 3 points that are outlined and yes, all the action is on the Solana now days. @nevin.freeman Please consider this proposal!

1 Like
157

Just to be 100% clear. I do not suggest burning the already unlocked team runway.

158

Linking related post here.

159

Linking here my thoughts and observations from the recent Reserve / ABC Labs / BFF community wide call on Jan 15.

161

Exploring a Strategic Collaboration with Upbit’s Index Ecosystem

Upbit already operates its own in-house crypto index business (UBCI), including market, sector, and strategy indices. This means Upbit has both the technical capability and institutional experience to design and publish indices without regulatory friction, as these are positioned as market data and analytical tools rather than financial products.

This creates a strong strategic opportunity for Reserve to collaborate with Upbit on a DTF-style structure. If framed correctly—not as an ETF-like product, but as a strategy-based trading feature built on index methodology—a DTF can fit naturally into Upbit’s existing index ecosystem.

From Upbit’s perspective, such a collaboration could:

  • Expand advanced trading functionality without crossing into regulated financial product territory

  • Increase user engagement, retention, and trading volume through periodic rebalancing and multi-asset strategies

  • Leverage their existing index brand while maintaining full platform control

For Reserve, partnering with Korea’s dominant exchange offers immediate credibility, distribution, and exposure that would be difficult to replicate elsewhere. Importantly, this does not require Upbit to launch a new regulated product—only to extend its current index business into a higher-value strategic trading layer.

Given these conditions, pursuing an Upbit collaboration is not speculative marketing, but a realistic, high-leverage opportunity that aligns with both regulatory constraints and business incentives. This is a partnership worth actively exploring, sooner rather than later.

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162

Looks interesting @Inspired.

Do you have a link to their current relevant offerings? Also would you be able to introduce Upbit to @ivanhalen0x ?

163

Thank you for your interest.

To clarify first, Upbit does not currently offer any investable or tradable products based on its indices. What Upbit provides today are index and market data services, positioned strictly as analytical and informational tools. Below is a fact-based summary.

Upbit Index–Related Services

Upbit operates its own proprietary index framework called UBCI (Upbit Cryptocurrency Index). These indices are published for market reference and analysis purposes, not as financial or trading products.

Publicly available index categories include:

  • Market Indices – representing overall crypto market performance

  • Sector Indices – grouping assets by sector (e.g., DeFi, platforms)

  • Strategy Indices – calculated based on predefined allocation or rebalancing rules

  • Thematic Indices – constructed around specific themes

Upbit has also disclosed examples of strategy indices, such as the
BTC–ETH Duo Index, which combines Bitcoin and Ethereum into a single index methodology.

Importantly,
there are no officially launched DTFs, ETFs, ETNs, or other tradable financial products derived from these indices at this time.
The indices remain purely informational.

Brief Introduction to Upbit

Upbit is one of the largest cryptocurrency exchanges in Korea, known for its deep liquidity, conservative listing standards, and cautious approach to regulatory compliance.

Notably:

  • Upbit maintains in-house capabilities for market data, index design, and analytics

  • New initiatives are typically evaluated with a strong emphasis on legal interpretation and compliance

As a result, its index business has been developed and operated within the scope of data and analytical services, rather than financial product offerings.

It is also worth noting, from a community perspective, that RSR is not currently listed as a KRW trading pair on Upbit, despite there being an active base of Korean holders. As a result, access can be somewhat inconvenient for local users, which many find unfortunate.

1 Like
164

Rationale makes sense.

“Distribution leverage” for Upbit to feature a DTF with rev share back to them, at low cost and battle tested safety (infra already built) and governance outsourced to a community.

165

Thanks for the thoughtful framing — I agree the rationale is reasonable.

From my perspective, the “distribution leverage” point is simply an observation about Upbit’s existing strengths as a platform, rather than a concrete proposal. Upbit already has a large domestic user base and established discovery channels, so featuring any strategy-oriented structure would naturally benefit from that reach.

At the same time, I’m not suggesting that Upbit should take on product ownership, governance, or additional regulatory responsibility. The idea, at a high level, is that any such exploration would need to remain aligned with Upbit’s current role as a platform and data provider, leveraging existing infrastructure rather than introducing new operational or legal complexity.

In that sense, it’s more about recognizing structural compatibility than advocating for a specific implementation.

1 Like
166

Want to extend an invitation to come on one of our weekly calls on X to present and discuss this proposal. Thank you for the thoughtful approach here.

167

I apologize for not being able to attend due to personal circumstances.
I’ve prepared a PPT presentation and shared it via Telegram.
Please feel free to review it and share your thoughts.

1 Like
168

I don’t think a burn is necessary. Instead, I would like to see RSR participants to be further rewarded by the unlocks, instead of being diluted. Nevin previously mentioned a model in which unlocks are milestone based, and in accordance to protocol needs. That works in theory to fund the protocol itself, but nonetheless, RSR holders still get diluted, all things considered.

I think what Nevin proposed works for a portion of the RSR, that we acknowledge to be for protocol funding purposes only (and as bonus to the team).

However I think another portion of the unlocks should follow a predictable and linear schedule, awarded in a pro-rata way to staked-RSR pools. For instance, if ETH+ has 50% of all RSR staked, and eUSD has 40%, and other DTF’s the remaining 10%, then the RSR emissions should go 50% to the ETH+ pool, 40% to the eUSD pool and so on.

This would increase the RSR staking APY on these pools, thus attracting more stakers, which makes DTF’s more secure, all the while rewarding existing stakers. Furthermore, because the token unlocks go into staked pools, there is at a minimum a 2 week delay before the unlocks have a negative impact on RSR price, though realistically much longer than 2 weeks.

veRSR: if such a thing is adopted, it could be used to vote which pools get further bonified beyond the pro-rata distribution I just mentioned.

Just my 2 cents

169

First, I would like to sincerely thank the team for presenting and sharing my PPT during the recent weekly meeting.

The discussion mainly focused on the importance of a KRW trading pair, which I fully agree is highly meaningful in terms of accessibility for Korean users.

At the same time, I believe it may also be valuable to consider a broader perspective.

The Korean market is widely recognized as one of the most altcoin-dominant markets globally. According to multiple industry reports, including research from Kaiko and Chainalysis, approximately 80–90% of trading volume on Korean exchanges is concentrated in altcoins — significantly higher than global averages.

From a community perspective as well, many of you may already notice that Korean RSR holders are highly active across Telegram and X, and their presence within the global community is quite visible.

Given these market characteristics, it may be worth exploring not only listing discussions but also the potential use of Upbit’s existing index infrastructure.

Upbit already operates several real market indices, including:

• Upbit Composite Index
• Upbit Altcoin Index
• Upbit 10 / Upbit 30
• Bitcoin Group Index
• Ethereum Group Index

It is also important to recognize that Upbit, as a centralized exchange, plays a critical role as a major market infrastructure, supported by deep fiat liquidity, conservative listing standards, and a strong retail-driven user base.

Centralized exchanges remain the primary gateway for market access and continue to serve as a key driver of ecosystem expansion.

At the same time, the broader crypto landscape is gradually evolving toward a hybrid structure where on-chain finance and centralized infrastructure coexist, making the integration of data, indices, and market accessibility increasingly important.

From this perspective, potential collaboration could extend beyond simple listing discussions into several practical and low-friction areas.

For example, this could include reference-level index data integration, market data and research collaboration, phased liquidity initiatives, or community education partnerships.

Furthermore, building on this index framework, structural collaboration models similar to CMC20-style DTF concepts could represent a meaningful long-term direction.

Such an approach would not require the introduction of new financial products, but rather leverage Upbit’s existing strengths in data, distribution, and market infrastructure.

170

Thoughts on “RSR Health Update: Where the Conversation Stands”

First of all, thank you for taking the time to share such a detailed RFC and the recent updates. Pausing emissions and exploring a milestone-based unlocking structure feels like a thoughtful and responsible step toward long-term sustainability, and I understand the intention behind this direction.

That said, after carefully reading through the full discussion and observing the community reactions, I’d like to share a perspective from the long-term holder side.

While many people understand and appreciate the direction, it also seems that for some long-term participants, the update has created a certain level of unease. Not because the idea itself is wrong, but because the long-term implications are still not fully clear.

In particular, with the assumption that the 30B will not be burned, there remains an important question around how that supply will eventually be used. Without a clearer picture, it naturally raises concerns that the same dilution cycle could repeat over time.

Milestone-based unlocking is a strong forward-looking framework, and I support the idea of tying future supply to real progress. However, from the perspective of those who have supported the protocol through earlier stages, there is also a natural concern about long-term alignment and how continued unlocks may impact them over time.

This is not about asking for compensation, but rather about maintaining a sense of balance, fairness, and trust. For participants who have stayed with the project for years, clarity around how such a significant portion of supply will be handled is an important part of that trust.

I understand that burning may not be the preferred option. However, at the moment, there doesn’t seem to be a clearly defined alternative that directly addresses this concern while balancing protocol funding, ecosystem growth, and long-term dilution. For that reason, it might be worth keeping the burn discussion open as one of the possible options, rather than fully closing that path.

Overall, I support the direction and the effort to build a more sustainable model. I just hope that, alongside technical design and financial structure, the emotional and psychological perspective of long-term holders is also taken into account, as trust and alignment are key parts of a healthy ecosystem.

I’m not speaking as a representative of all holders, but as one long-term participant, I would really appreciate hearing @nevin.freeman perspective on this, as I believe many others in the community may share similar questions.

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171

@nevin.freeman including my questions on your “RSR Health Update: Where the Conversation Stands.”

Questions also posted to X here.

  1. What do you think about longer term user RSR locks in exchange for a greater share of rewards to reinforce positive sum compounding (beta testing, word of mouth referrals, outreach, amplification, etc). For example, if 30% of RSR were locked for 3+ years, what might be the 2nd order effects?

  2. Will milestone-based RSR unlocking live in code, or live as a promise people hope gets honored?

  3. What do you think about locked RSR holders playing an approval role in all large annual treasury allocations including emissions, incentives, vendors and burns?

  4. If ABC/CC delegates RSR to community members, should locked RSR holders approve those delegates after an open competition for the roles? Why or why not?

  5. Are there other ways you are thinking about increasing RSR utility or long term commitment of RSR holders?

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[RFC] Reserve Delegates Plan Proposal