rFOX 3.0: Ether FoxTrot

Proposal Discussion
1

Summary

ShapeShift DAO will migrate all staking activities from Arbitrum back to Ethereum Mainnet, eliminate the legacy rFOX burn buckets, and expand fee-sharing to include all ShapeShift trading fees. To execute this, we propose a three-phase vote:

  1. Vote 1 – Fee-Sharing Structure (Ranked-Choice)
  2. Vote 2 – Staking Mechanism (Ranked-Choice)
  3. Vote 3 – Final Ratification (Yes/No)

Abstract

The current rFOX system on Arbitrum fragments liquidity and limits reward scope to THORChain fees under a 25%/15%/10% burn schedule. We’ll realign incentives by:

  • Moving staking to Ethereum Mainnet (our deepest liquidity),
  • Capturing 100% of trading fees into the treasury,
  • Abolishing token burns in favor of direct staking rewards.

The community will decide, via instant-runoff (Ranked-Choice) on Snapshot, first the fee-sharing model, then the staking product, and finally ratify the whole package.

Motivation

  • Unified Liquidity & UX: Mainnet staking consolidates assets, reduces bridging friction, and leverages the largest pools.
  • Broader Revenue Capture: Including ALL trading fees (not just RUNE) maximizes DAO treasury growth.
  • Active Incentives over Burns: Token burns remove FOX from circulation but don’t directly reward participation—staking yields do.
  • Competitive Alignment: Leading DEXs employ fee-sharing paradigms that balance LP rewards, protocol treasuries, and governance incentives (see below).

Specification

Phase 1: Fee-Sharing Structure (Vote 1)

  • Method: Ranked-Choice (Instant-Runoff) on Snapshot
  • Options (rank 1→3):
    • A. Flat 25% of all fees → stakers; DAO retains 75%
    • B. Tiered by Platform Volume:
      • 5% → first $0–5 M; 10% → $5–10 M; 20% → $10–20 M; 30% → $20–30 M; 40% → > $30 M
    • C. No Fee Sharing: 100% of fees retained by DAO
    • No. No change to the rFOX program

Phase 2: Staking Mechanism (Vote 2)

  • Method: Ranked-Choice (Instant-Runoff) on Snapshot
  • Options (rank 1→2):
    • A. Single-Sided FOX Staking → USDC Rewards
    • B. FOX/ETH LP Staking → FOX/ETH LP Token Rewards

Phase 3: Final Ratification (Vote 3)

  • Method: Single-Choice (For/Against) on Snapshot
  • Question:

“Shall the DAO implement Mainnet migration, eliminate rFOX burn buckets, expand fee-sharing to all trading fees per Vote 1, and adopt the staking mechanism per Vote 2?”

Benefits

  • Transparent & Inclusive: Instant-runoff RCV lets the community express full preference order, avoiding split votes.
  • Competitive Incentives: Aligns ShapeShift staking rewards with industry benchmarks.
  • Treasury Growth + Participation: Captures all fees for treasury while still rewarding active stakers.
  • Simplified UX: One unified staking product on Mainnet reduces fragmentation and complexity.
  • Re-using existing assets: the evergreen fox contract can be used for both of these purposes, so minimal smart contract upgrading / auditing will be required

Drawbacks

  • Longer Process: Three votes extend the decision timeline by ~10 days.
  • Governance Complexity: RCV may be unfamiliar to some voters—needs clear communication and education.

Vote

  1. Vote 1 – Fee-Sharing Structure (Ranked-Choice): A, B, C, No
  2. Vote 2 – Staking Mechanism (Ranked-Choice): A, B
  3. Vote 3 – Final Ratification (Single Choice): For / Against

Snapshot Voting Links (will appear here once live).

Please review, discuss, and prepare to vote. Let’s build a more unified, competitive, and sustainable staking framework on Eth Mainnet!

5 Likes
2

Great proposal @ProfMcC, thanks for putting this together.

1 Like
3

Thank you prof for this update.

1 Like
4

Thanks @ProfMcC - much more clear now and I like thinking about this as an evolution of rFOX and the overall FOX staking program.

I think similar to the current version of rFOX, the buckets should always be adjustable by governance in the future. I know others may disagree but personally I would still like to at least see an option that allows for some buy back/burn of FOX in this still.

I would personally suggest adding an option that is something like the original rFOX proposal (50% to the DAO treasury, 25% to stakers, 25% to buyback and burn) though the specific numbers could of course be debated, an option that includes the burn% would give voters a clearer choice to make on this if they want to vote the proposal forward but also still want to see the DAO burning FOX.

2 Likes
5

I am a fan of Option B in Phase 1 and Option B in Phase 2.

Working capital (providing liquidity) as a means to earn a portion of DAO revs plus the ability for people to earn more if there is more volume on the platform creates a natural incentive pendulum with users as well as strong reasons for them to share it with their friends. More volume = more monies.

Thanks for putting these options together

2 Likes