[RFC] veRSR + Reserve Fund – Turning RSR into a True Long-Term Alignment Token
Current Situation
Right now RSR lacks a strong long-term alignment mechanism:
- Locking is fragmented: every Index DTF has its own vote-locking system
- Loyalty not rewarded: There is no meaningful difference in rewards or power between someone who commits RSR for years and a short-term speculator
- No decentralized treasury: The protocol has no community-owned treasury that rewards loyalty and funds growth
Core Idea
Transform RSR into a true long-term alignment token (like veCRV or veAERO) that strongly rewards commitment, decentralizes governance, and creates a powerful growth flywheel.
1. veRSR (vote-escrowed RSR)
- Users lock RSR → receive veRSR (non-transferable voting power)
- Longer lock = linearly more veRSR (max lock time to be discussed - e.g. 4 years)
- Unifies governance and reward boosts across all Index DTFs that use RSR as the governance token
2. The Reserve Fund
A community-owned treasury denominated and filled only with RSR.
Proposed funding sources (to be discussed):
- Portion of protocol fees (RToken issuance/redemption fees, future revenue streams) directed to the Reserve Fund
- Early-unlock penalties from veRSR
- Optional one-time seed from existing treasury
3. Governance & Rewards
Only veRSR holders can vote. veRSR gives you:
- Voting power on all protocol-wide decisions
- Voting power + reward boosts on every Index DTF
- Right to direct how the Reserve Fund is spent (buybacks, grants, marketing, extra yield, etc.)
- A pro-rata share of Reserve Fund distributions
Transition Plan
| Current situation | After upgrade |
|---|---|
| Each Index DTF has its own vote-locking token | All replaced by one global veRSR token |
| Existing per-DTF locks | Auto-converted 1:1 into veRSR (same remaining time) |
| Regular RSR staking (first-loss, 2-week unstake) | Untouched – continues exactly as today |
| Governance of individual Index DTFs | Now uses global veRSR voting power + boosts |
| Protocol-wide decisions centralized | Now exclusively governed by veRSR (including Reserve Fund spending) |
Benefits
- One token: veRSR governs and boosts everywhere
- Real revenue share for long-term holders via Reserve Fund distributions + boosts
- Rewards loyalty and turns RSR into a high-conviction asset
- Proven model: See Curve, Aerodrome, etc.
- Flywheel: Higher conviction → higher TVL → more fees → bigger Reserve Fund → higher yields → more locking
Risks & Mitigations
- Centralization risk (whales lock early): Mitigated by strictly linear veRSR and max lock
- Increased complexity: Technically more moving parts, but end-user experience becomes simpler
Looking forward to community feedback and discussion!
*Quick note*: This is by no means intended to be an exhaustive list of features, benefits, or risks, just a set of rough ideas I’ve bounced off James and Ham in recent conversations. Happy to discuss and iterate this heavily based on community input, so every comment/suggestion is very much welcome!