As of lately, with the Shanghai fork timeline set and the development of fractional staking platforms in the community’s sight, there is an opportunity for the Reflexer DAO to explore new revenue possibilities for the protocol.
While friendly forks are the path forward for diversification/experimentation, there are still some things that can be done by the DAO (in our case the Reflexer community) to build on top of an already resilient RAI system.
There aren’t too many revenue related ways to be explored in this direction -as RAI’s core contracts are already ungoverned – but the ones that exist, seam to have the capacity to better certain aspects of the protocol usage as debated in the forum and the discord server:
production cost optimization
value capturing – incentivization for RAI minters and liquidity providers, public pooled safes
First point is already being tackled and if this proposal passes, the stability fee will be reduced to 0.5%.
Second point could be approached through a community effort, from parties that have a vested interest in the success of this pure-blooded stable asset.
RAI Booster – the RAI Foundation’s proposal to the Reflexer DAO:
RAI Foundation is a non-profit set to uphold RAI’s public good Ethos, without any influence on the protocol itself. The Foundation is not associated directly with Reflexer team, nor has there been yet any formal acceptance of the Foundation as [one of] the official non profits that support RAI ecosystem in a non invasive way.
The opportunity arises for the RAI community to leverage through the Foundation’s RAI Booster - decentralized, trustless and permissionless staking solutions - in order to create its own yield bearing mechanism by offering Liquid Staking to the RAI ecosystem. Basically, staking infrastructure like the Geode Staking Library allow protocols to develop ways to transfer the yield of a volatile asset (ETH) to a stable asset like RAI, without interfering with RAI’s stability system, eliminating tail risk and adding to the Ethereum Network resilience.
By operating private or public permissionless and configurable staking pools, the RAI Booster would accrue the staking rewards for the RAI market participants (that want to stake ETH) and set withdrawal contracts accordingly, to boost existing/future LP reward contracts or to build new LP pools.
The public staking pools can be decentralized and even governed with the Reflexer governance token FLX
- Increase TVL by offering Liquid Staking. This leverages ETH staking to incentivize LP without the need of a RAI fork
- Generate sustainable revenue with a pool maintenance fee and/or staking as a service fees. Except for current Foundation expenses (~10% of revenue), the Foundation will pass the revenue to the Reflexer DAO’s governor. The community decides how this revenue will be used (example: support as much as possible of the protocol stability fee/borrow rate, aiming for RAI access point comoditization, avoiding underproduction of RAI)
- Actively help Ethereum security through diversification
- The setup would be fully segregated, providing security and avoiding tail risk to the RAI Booster and RAI system
State of the art
At this point, the Foundation is whitelisted as Node Operator with Geode infrastructure, on Goerli test network, testing private and public Pool initiation and steering, post Shapella.
The aim is to spin-up a working RAI Booster on Goerli network and deploy it after Shanghai fork, once tested and functional. This wishes to be a community effort so jump in with the Foundation on Discord / Twitter to see how you can help!
Arguably, using Permissionless, Trustless Staking Solutions would better fit a friendly RAI fork, as per this Forum post, but it would do just that: promote a fork and the result would not be RAI - which is a positive thing - BUT, for the delight of hard-core RAI degens, this approach could also benefit the pure-blooded, battle tested RAI system and let its public good Ethos thrive!