This proposal outlines a critical decision for the ShapeShift DAO to bring staking activities back to Ethereum mainnet, aligning with our primary liquidity pool. The core question is:
How should trading fees be shared with stakers and liquidity providers on mainnet?
The DAO will vote among the following options:
Option A: Flat 25% Sharing
Option B: Tiered Sharing Based on Platform-Wide Volume
Option C: No Fee Sharing
This decision will directly impact the upcoming unified staking model and its effectiveness.
Context
The ShapeShift DAO aims to simplify operations and leverage existing liquidity by migrating staking activities back to Ethereum mainnet. With the revised fee-sharing model, all revenue (not limited to THORChain fees) will be included, significantly reshaping FOX tokenomics. This move signals the end of FOX token burns, shifting toward rewarding active participation through staking. This proposal determines how trading fee revenue will be shared to support long-term platform sustainability and incentivize user engagement.
Proposal Options
Option A: Flat 25% Fee Sharing
25% of all collected trading fees distributed to FOX/ETH LP stakers.
DAO retains 75% for operational stability and growth.
Fixed percentage ensures predictability.
Example Cumulative Rewards (0.55% fee rate):
Volume
Shared (25%)
DAO Retained (75%)
$5M
$6,875
$20,625
$10M
$13,750
$41,250
$20M
$27,500
$82,500
$30M
$41,250
$123,750
$40M
$55,000
$165,000
$40M+
+$13,750 per $10M
+$41,250 per $10M
Pros:
Easy to implement and communicate
Predictable revenue for treasury
Stability during varying trading volumes
Cons:
Limited growth incentives
Same rate regardless of high platform performance
Option B: Tiered Sharing Based on Platform-Wide Volume
Rewards scale with increased trading volume.
Provides higher incentives as platform grows.
Tiered Fee Sharing Structure:
Volume Range
Shared %
Shared Amount
DAO Amount
$0–$5M
5%
$1,375
$26,125
$5M–$10M
10%
$2,750
$50,875
$10M–$20M
20%
$11,000
$94,875
$20M–$30M
30%
$16,500
$133,375
$30M–$40M
40%
$22,000
$166,375
$40M+ (per $10M)
40%
$22,000
$33,000
Pros:
Strong incentives for growth
Encourages active community engagement
Rewards scale with platform success
Cons:
Increased complexity
Reduced DAO treasury retention at higher volumes
Harder to forecast revenue
Option C: No Fee Sharing
All trading fees retained by DAO.
No direct rewards to stakers or liquidity providers.
Pros:
Maximum DAO treasury accumulation
Simple financial forecasting
Cons:
Reduced incentives for stakers and LP providers
Potentially lower community engagement
Voting Choices
This is a single-choice vote. Select only one:
Option A: Flat 25% Fee Sharing
Option B: Tiered Fee Sharing Based on Platform-Wide Volume
Hmmm, personally I don’t think the burn should be retired.
I would like to see an option in this proposal that retains the burn instead of all options being to retire burns.
Effectively these are bucket changes being voted on for rFOX if I am understanding correctly and this would set burn to 0% - maybe make it clear what the new buckets looks like and what those options are in that sense (and preferably allow an option for voters to still choose to vote for an ongoing burn).
Or at the very least there should be an option D which would mean no changes to the current rFOX buckets.
Hmmm reading this closer now this seems like a more major change to rFOX than the proposal is clear about.
It seems the proposal is to retire rFOX entirely and replace with rewards to eth/fox LP stakers on mainnet (so no more single sided staking at all).
Not sure I support that direction (we have a lot of single staked fox I don’t want to see unstaked because of this change) , but regardless the proposal should be clear this would retire rFOX and replace with a new staking mechanism entirely on mainnet if that is the goal?
That’s not entirely true. There’s another ideation post (that I’m writing now) that would be the vote between whether to have single-sided staking with usdc rewards and LP staking with LP rewards.
So, ultimately, there’s a choice between 1) the tiers or flat rate model, 2) whether to have it be single-sided fox with usdc rewards or eth/fox LP with eth/fox LP rewards
Then, the whole thing would be wrapped as a final proposal/presentation to be voted yes/no after these 2 things have been decided.
To me it seems like any change to the program - e.g. changes to rFOX, keeping single sided stake or not, moving to mainnet etc should all be the first proposal - then there should be options attached on the fee sharing such that if the proposal passes a new vote goes up for voters to choose between the options (basically the same process rFOX proposal originally went through).
Basically voters need to know (1) what changes to current rFOX they are voting on and then (2) vote between various fee/bucket options if and only if (1) passes.
It more directly correlates the success of the DAO to the value of the FOX token
It’s simple to communicate in one sentence (no tables to explain the benefits) - we have issues currently where even people within the DAO struggle to understand our programs, so how can we expect any one else to
Gives the FOX token an inherent value, which is a function of monthly revs shared and total staked FOX (and I believe this number is an order of magnitude higher than the current market price of FOX)
Option B disincentivises early use in the program by FOX holders as only a low percentage of revs are initially shared (why would I stake now for 5% when I can do it later for 40%, assuming the DAO gets there).
E.g. my suggestion would be to have a proposal about the changes that is simply for/against - if it passes, have it contingently kick off another vote on the options for voters to choose from (with those options included in the proposal for debate/discussion and so voters know what options will be available if they pass the proposal in the first place).
If we encounter this issue of multiple options voting more frequently we should look into a better way to deal with it, and preferably in a single vote in my opinion. The two-step vote we’ve done last time for RFOX was done to " to prioritize the product and engineering work streams to enact this proposal as quickly as reasonably possible", but didn’t really solve much in terms of fairness for each option.
Ranked Choice voting is supported by Snapshot (and compatible with Shielded Voting), it could be a way to do this, but I’m not sure most voters would be familiar with the way this works.
Our Governance Process doesn’t explicitly restrict the “type of vote” currently, we just require 2 options for the final vote (For/Against), but we don’t forbid having more options either. We also only mention seeking a majority, without specifying if it’s a simple or absolute majority… Colloquially a plurality is a form of “majority” and it’s hard to know what was meant originally, so it’s unclear what would happen if a vote didn’t produce an absolute majority.
Until now all the previous votes with multiple options produced a majority as far as I can tell But maybe @ProfMcC it would be a a good idea to specify how the winner option will be picked (what happens if there is no majority) and if you decide to use Ranked Choice Voting for example.
Lastly @jonisjon, if you desire to add more options for this Proposal and the proposer would not agree to add them through discussions for any reason, you still have the ability to create a Counter Proposal with the option you want (e.g. keeping the burn and all other the specifications of the original Proposal apply) during the Ideation phase. As long as you respect the form required to submit Proposals, it must then be added as a voting option in the Final Vote. Doesn’t solve the fairness/outcome picking issue above, but at least gives representation of your desire in the final vote.
Got you. I am reposting something new that will detail a three-step process, wherein all options are laid out and first vote is whether the change happens yes/no
Second vote is rank-order choice between all of the different option combinations
Third vote is a final run-off between the top two option combinations selected in the rank-order choice voting round.
I appreciate your perspective on this. In light of the KPI proposal passing and the rFOX program having no KPIs (and failing to meet the KPIs proposed), the purpose of this was to ensure that we have a plan to migrate from the existing rFOX program (25% rFOX/ 10% LP rFOX / 15% burn) to something new before ending the rFOX program.
I apologize that this wasn’t made clear from the start; I am genuinely interested in getting the opinion and buy-in of DAO members for this program going forward. I think it can end up being a real win-win for both the participants of the (new) program and the DAO itself.
Thanks @ProfMcC - i’ll take a look over the new proposal, but at the very least I think the intention and process of the proposal is much more clear now so appreciate that a lot!
This is a wider discussion most likely, but IMO many of the best token models over the long term have used and will use some version of the buyback and burn methodology in order to create the most sustainable and value accruing tokenomics over the long term (lots of examples of this out there, BNB/binance probably being the most well known and succesful over time, but its also being pioneered with lots of other token models today including MKR and AAVE have both implemented versions of this recently).
Buying and burning tokens both adds liquidity (via adding ETH to the pools where it is bought) and lowers the FDV over time creating more headroom for the asset (FOX in this case) to rise. Obviously we need longer and more burns than we have had to this point to really feel the effects but I don’t think its an issue with burning to this point, I think the methodology of the burn still makes a lot of sense and it accrues value to all FOX across the ecosystem over time.
Regardless reasonable folk can of course disagree on this direction and I know others are not in favor of the burn, my ask would be just to make it an option in the choices but i’ll put that over in the other thread.
Option A: Flat 25% Fee Sharing
Pros:
Cons:
Option B: Tiered Sharing Based on Platform-Wide Volume
Option C: No Fee Sharing
But maybe 