Protocol Funding in Saturn I and Beyond

Governance
8

This has been a challenging set of polls to put together for various reasons, including uncertainty about whether it will directly lead to governance actions (RPIPs, roadmap changes, etc.). Part of this effort aims to gauge sentiment on foundational decisions that may set the stage for future governance before/during Saturn. I’ve adopted a general approach, organizing several categories for you to express your opinions.

This discussion encompasses several topics:

  1. Boosting pDAO Treasury:

    • Supporting rETH adoption through incentives, integrations, marketing, and related initiatives.
    • Assisting in the repayment of GMC grants and sustaining essential projects. (At the current RPL price, GMC funding is significantly limited, negatively impacting ongoing and future projects.)

  2. Treasury Diversification:

    • Generally, converting some received RPL into ETH is acceptable. However, I believe income stream diversification remains preferable, especially in cases where RPL inflation or value fluctuations limit meaningful conversion into ETH, or governance processes become too slow to manage timely conversions.

    If we want the capacity to directly accept ETH rewards into the reserve treasury, we should discuss this now. If the team advises against taking ETH income from node operator or voter shares due to technical infeasibility for Saturn 1, this poll’s outcomes on that point will become irrelevant, as I would not push against their recommendation.

  3. Increasing rETH Yield by Reducing Node Operator Rewards:

    • This proposal has clear upsides and downsides which have been extensively discussed.

The above three topics have been explored across multiple discussions: protocol funding beyond RPL inflation and speculation, research and governance channels in the discord, this forum post (among others). My aim here is to seek agreement on fundamental concepts before delving deeply into implementation details, which are likely best decided once Saturn 1 has been operational for a while.

Vote Categories:

1. ETH Diversification:

In Saturn 1, convert some RPL into ETH immediately each rewards period.

This could include conversions triggered at specific RPL price milestones or other criteria. Currently, tokens cannot be withdrawn from the vault, so these funds are not immediately available unless they are spent/transferred immediately. Support for direct ETH (technically wETH or other ERC-20 token) withdrawals would need to be built in the near future.

  • yes
  • no
  • maybe (depends)
0 voters

2. ETH as an Income Stream (mid/short-term Treasury Income):

Explore the feasibility of directly allocating ETH income from node operator or voter shares to the treasury in Saturn 1.

If “yes”, this poll will formally ask the team to advise on this possibility. My rationale is that diversified income streams help avoid the necessity of large, disruptive RPL-to-ETH conversions and mitigate delays from governance decisions. While I desire the capability, I recognize the uncertainty around the optimal percentage at the start of Saturn 1.

Vote - ETH Income Stream to Treasury (diverted from Node Operator commissions):

  • Yes, good to build in but not necessarily plan to use immediately in Saturn 1
  • Yes, and plan to divert a small amount (0.5%)
  • Yes, and plan to divert a larger amount (1-2%)
  • No
0 voters

If yes, should the ETH come from:

  • Node operator share (currently 5%)
  • Voter share (RPL stakers, currently 9%)
  • Some from each
  • None because I don’t want to do this
0 voters

3. RPL Diversion (Short-term Treasury Income):

Consider significantly reducing the Node Operator share of RPL rewards from the current 70% to approximately 35% after Saturn 1 has been operational for some time, redirecting the difference to the treasury.

The rationale is the treasury’s immediate funding requirements for ongoing operations and integrations. Node Operators would still receive ETH rewards from the voter share, and RPL rewards will phase out with Saturn 2, anyway.

Mitigating factor: While I prefer starting asap, ensuring maximum incentives for migration to megapools at Saturn 1’s launch may delay implementation of this.

Vote - RPL Diversion:

  • Agree to significant reduction (e.g., 35%) after Saturn 1 is established
  • Agree, but prefer smaller reduction (TBD)
  • No, maintain current NO share of 70% of inflation
0 voters

4. rETH Yield Increase (Saturn 1):

Explore increasing rETH yield by reducing Node Operator ETH rewards in Saturn 1.

This aims to enhance rETH attractiveness and boost adoption.

Mitigating factor: Reduced NO rewards could decrease operator incentives and limit potential new income streams for the treasury.

Vote - rETH Yield Increase:

  • Yes, reduce NO share (current 5%)
  • Yes, reduce voter share (current 9%)
  • Yes, reduce both
  • No
0 voters

The primary goal of these votes is to facilitate short- to mid-term increases in pDAO income and diversification. Long-term funding strategies will require further consideration in alignment with developments like Saturn 2’s UARS.

These polls are intended to capture general sentiment and may or may not lead to specific RPIPs, governance initiatives, or roadmap adjustments.

Special note:
I recognize some of you have repeatedly expressed your views across various platforms. No need to repeat below this poll unless you wish to.

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Rebalance RPL Inflation for Protocol Funding - Sentiment Poll