Summary
This proposal updates the rFOX program (rFOX 2.0 v2) to launch rFOX 3.0 v3: Simple 25% rewards 5% burn, keeping everything on Arbitrum. It distributes 25% of all ShapeShift DAO revenues in USDC to FOX stakers on Arbitrum, sent directly to their staking EVM addresses. It also introduces a simple, 5% burn mechanism based on monthly fees earned by the DAO.
Abstract
This proposal replaces the flat, volume-triggered burn and Thorchain-based mechanics with an all-Arbitrum design that rewards FOX stakers in USDC and simplifies FOX buyback-and-burn.
Motivation
The existing rFOX program relies on Thorchain address mapping and includes a burn of just 15% of RUNE fees that go to the treasury. This proposal removes the complexity and weak incentives by:
- Migrating entirely to Arbitrum and EVM-native FOX staking addresses.
- Replacing the existing 15% burn of RUNE with 5% of all Revenue.
- Distributing 25% real revenue in the form of USDC to users who staked FOX.
This redesign offers clarity, incentives, and streamlined implementation.
Specification
-
Chain: Arbitrum only. No Thorchain address linkage or distribution.
-
Reward Distribution:
- 25% of all ShapeShift DAO revenues are distributed monthly in USDC to FOX stakers on Arbitrum.
- Rewards are sent directly to the EVM address used to stake FOX.
-
Change to existing Burn:
- The current ongoing general burn is changed to be from 15% of all RUNE to 5% of all Revenue.
KPIs
Key Performance Indicators (KPIs)
| KPI | Definition | Success Criteria |
|---|---|---|
| Monthly Trading Volume | Monthly volume traded through ShapeShift | Success: $100M/month; Smashing Success: ≥ $150M/month; Failure: < $50M/month for 3 consecutive months |
| FOX Buyback and Burn | Impact on circulating FOX supply (1B total supply) | Success: Decrease by ≥1% during any quarter; Failure: Decrease by <1% during all quarters |
| USDC Distributed to Users | Monthly total USDC rewards distributed | Success: ≥$40K/month; Smashing Success: ≥$80K/month; Failure: <$25K/month for 3 consecutive months |
| Unique rFOX Participants | Number of new unique addresses receiving USDC rewards | Success: ≥35 monthly; Smashing Success: ≥75 monthly; Failure: <35 monthly for consecutive quarters |
| Staked FOX Tokens | Percentage of circulating FOX tokens staked (currently 4.7%) | Success: 10%; Smashing Success: 15%; Failure: <10% sustained |
| Staker Retention Rate | Percentage of users who continue participation MoM | Success: ≥40%; Smashing Success: ≥60%; Failure: <30% for two quarters |
| Staker Re-staking Rate | Percentage of users who stake (>10% of original stake) again within 3 months | Success: ≥20%; Smashing Success: ≥40%; Failure: <10% for two quarters |
Benefits
- Simplified Infrastructure: No need to link 0x and Thorchain addresses. Arbitrum-only means lower costs, reduced friction.
- Real Revenue to Users: USDC rewards > RUNE rewards. Tangible value to FOX stakers.
- Simplicity Incentives: Aligns FOX burn with monthly revenue in an easy to digest way.
- Stronger Messaging: Clean and clear: stake FOX, earn USDC, help burn FOX.
- User Growth Potential: Revenue share across all protocols (not just Thorchain) widens appeal and strengthens reward base.
Drawbacks
- Burn is wasteful: No evidence a buyback and burn does anything.
- Arbitrum-Only Limitation: Non-Arbitrum users must bridge or miss out.
Vote
- For: Adopt rFOX 3.0 v3 on Arbitrum with direct 25% USDC rewards and flat 5% FOX burn monthly.
- Against: Maintain the current rFOX program with Thorchain addresses and fixed burn logic.
