# \[RFC\] veRSR + Reserve Fund - Turning RSR into a True Long-Term Alignment Token **URL:** \ **Category:** Governance & Delegates\ **Created:** [December 4, 2025, 3:18pm UTC](https://forum.reserve.org/t/rfc-versr-reserve-fund-turning-rsr-into-a-true-long-term-alignment-token/1364 "2025-12-04T15:18:16Z")\ **Posts on this page:** 3\ **Page:** 1
**Author:** ![0xd15co](https://dub1.discourse-cdn.com/flex005/user_avatar/forum.reserve.org/0xd15co/32/926_2.png) [@0xd15co](https://forum.reserve.org/u/0xd15co)\ **Post date:** [December 4, 2025, 3:18pm UTC](https://forum.reserve.org/t/rfc-versr-reserve-fund-turning-rsr-into-a-true-long-term-alignment-token/1364/1 "2025-12-04T15:18:17Z")
# [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! ---
**Author:** ![Hubert](https://avatars.discourse-cdn.com/v4/letter/h/9d8465/32.png) [@Hubert](https://forum.reserve.org/u/Hubert)\ **Post date:** [December 11, 2025, 1:58pm UTC](https://forum.reserve.org/t/rfc-versr-reserve-fund-turning-rsr-into-a-true-long-term-alignment-token/1364/2 "2025-12-11T13:58:18Z")
Great development! Love the fact that it comes on top of the current staking system. ---
**Author:** ![0xJMG](https://dub1.discourse-cdn.com/flex005/user_avatar/forum.reserve.org/0xjmg/32/1104_2.png) [@0xJMG](https://forum.reserve.org/u/0xJMG)\ **Post date:** [December 18, 2025, 8:38am UTC](https://forum.reserve.org/t/rfc-versr-reserve-fund-turning-rsr-into-a-true-long-term-alignment-token/1364/3 "2025-12-18T08:38:17Z")
Great post @0xd15co. I included my comments here: > [@\[RFC\] RSR Health: Request For Comments](https://forum.reserve.org/t/rfc-rsr-health-request-for-comments/1269/127): > > Good morning. Related to RSR health discussion, the recent posts from Reserve ecosystem veterans [0xd15co](https://forum.reserve.org/t/rfc-versr-reserve-fund-turning-rsr-into-a-true-long-term-alignment-token/1364/1), [Ham](https://forum.reserve.org/t/rfc-rsr-health-request-for-comments/1269/120), and [Blue](https://forum.reserve.org/t/rfc-rsr-health-request-for-comments/1269/124) stood out. I encourage everyone to review them and ask questions as Confusion Capital / ABC Labs prepares to unveil an updated approach. This is the ripe window to engage in discourse now. Six months from, the path chosen is probably in motion, yet still needing runway to prove we chose well. But first, I want to return to the problems named in the [original RSR health RFC](https://forum.reserve.org/t/rfc-rsr-health-request-for-comments/1269) s…