yeah, I’m DEFINITELY not a expert or even particularly knowledgeable, but it seems like there is no 100% in securities cases. Some things I think about:
1) if using a buy/burn method, does the percentage of staked RPL matter?
If 10% is staked, 90% of rewards go to holders rather than folks ‘doing work’ (voting, running validators, etc). The structure would be: hold RPL and it will appreciate.
If 90% is staked, only 10% of rewards go to holders, and that portion seems incidental rather than ‘the intent’. The structure would be: run a validator, stake RPL for governance power and your RPL will compound.
2) Does the independence of the pDAO matter?
Most DAOs are ornamental; the rpDAO has both good decentralization and good independence from the team. If the team was making this choice unilaterally that could raise risks of regulation, but the team is more or less along for the ride on this one. Thus, the people changing the rules are the people who own the token AND are actually doing the work.
3) Do these changes actually raise us into a higher risk category?
The current reward structure is mostly based on price appreciation from other people buying. If you look at a person holding RPL from crowdsale they may have earned 3000% in appreciation, whereas someone who bought the moment staking was available would have earned maybe 50% in RPL inflation (and lost money overall). There are many RP investment theses stating how the price should rise because other people have to buy RPL to run minipools. So the vast majority of rewards flowed to early holders based on current tokenomics.
If instead even 50% flowed to passive holders (ie 50% unstaked in buy/burn), that seems like a model that may raise less regulatory risk (I do personally think we should shoot for 80-90% staked).
4) Does being listed on the exchanges matter?
First, given the number of outright scams/schemes on exchanges this seems unlikely. But let’s say we got delisted because of fears/major market cap coin. Anyone ‘using’ RPL for any intended purpose that we can think of will need to be much more crypto aware than just using a DEX: running a validator, voting on-chain, using a borrowing market, being an LP provider.
The reason to have it on a CEX is so that people can have it in their portfolio to passively appreciate, and if we desire this strongly enough to make decisions around, the token does feel more security-like.
An exception may be people who simply buy the token and send it to a SAAS provider.
5) Does the fact that RPL is already distributed matter?
An ICO is usually offered from a very centralized team with a roadmap for how to bring the token value, where investors are asked to fund early work with the anticipation of returns. Importantly the initial value goes to the centralized group.
Here, nothing is being sold from a centralized group (unless there are special OTC sales), everything happens between two anonymous users so no “investment contract” can exist there (see XRP lawsuit)
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At this point tokenomics is being driven largely from the ‘investors’, and we are not attempting to sell the idea to anyone outside of the current owners.
There is certainly some concern with centralization of several larger holders (Team wallet, patricio, etc), but thus far these have not really been involved in discussion of the tokenomic changes nor have I seen any evidence that they are leveraging these discussions to liquidate their holdings.
6) does marketing matter?
Most investment contracts start with a centralized group advertising (in one way or another) a product which is intended to increase in price. In our case, it’s very hard to imagine an advertising campaign to increase the number of people buying RPL; the DAO has made no attempt thus far to ‘sell’ RPL to anyone. With new tokenomics, like the old tokenomics, the value is (or is not) self-evident. When we do discuss the changes with outsiders, it is probably safest to primarily extoll the change in value to RPL stakers, not holders.
Just to be consistent, ‘buy parties’ may not be the best idea particularly if organized by major figures in the pDAO.
However, the basic fact remains that we are making these changes to make the RP products (smartnode/SCs) more saleable to NOs and rETH more saleable to stakers. We should focus our marketing on those groups.
Overall, my uninformed take is that the changes will somewhat decrease the risk of RPL being labeled a security compared to status quo; we may further decrease this by ensuring that our incentive structure favors active participants instead of passive holders, that we (the DAO) and the team don’t advertise RPL as an investment, and that the DAO remains largely independent of the core team and large holders in making these decisions.