Would love to get folks thoughts on this. We can discuss in the future what the other half of the fees should be used for, could include funding protocol development/bounties, SAFU fund for users, etc.
It is ultimately up to the community how these funds are used.
Totally agree on this one. But also mentioned in Discord: creating utility is just as important. Imo it is about scarcity and utility. So for me: yay.
I would put this up for a vote. 50%, 75%, 100% of the fees to buy and burn TRU.
Personally, I would vote for 100% until the price of TRU appreciates to a higher level like $0.25.
I’m definitely for this.
100% buy and burn - this is a good use of protocol fees
Agree on this. Definitely a good idea
I like this idea in the short to medium term, with a price target in mind.
I’m however very interested in starting to use some of these fees for a SAFU fund. The more we plan for an eventual default, the less painful it’ll be, imo. I’d suggest putting some small amount of the fees towards this fund from the start - or perhaps a minority % of every loan origination fee hereafter.
It seems like there is broad support for using some protocol fees for buy-and-burn but varying opinions on the exact %. Would appreciate if everyone could vote in the poll below:
0 voters
Whatever % is decided in this vote will still be subject to change by future community vote.
I vote 100% because TRU holders need a better incentive to hold.
I think it’s early to worry about the SAFU fund. Reasons being: 1) Fees today wouldn’t go very far to cover a default, and 2) I think the burden of risk management is largely on the TT team at this point because they have more insight on who the borrowers are (over time I hope this shifts more to the community).
I definitely see the value of the SAFU fund mid/long term but today I think it’s most important to give TRU buyers and farmers a strong incentive to hold their TRU today.
I agree with cato.
There is no incentive to HODL TRU except for potential price appreciation.
I think the first and most important thing to do is reduce the total supply. When a new investor looks at a project and sees 1.4 BILLION coins max supply, it scares the crap out of them. Esp when you add in the fact that a huge portion of it will be given away (40%) as rewards and another 20% to the team (now and future). Not to mention all the whales that bought in the presale and 7/8 still waiting to be unlocked. It’s not an attractive proposition.
YFI is the perfect example of a successful token structure. YFI team got 0% of YFI tokens allocated to them. There were 0% presales. It was a fair launch. Andre himself didn’t get allocated any YFI. That’s why YFI is worth $30,000 each today. They are a DeFi token that did it right.
Unless the protocol can somehow return significant profits from the loans directly back to TRU holders, there’s very little reason to hold TRU.
I can definitely see the argument for 100% buy-and-burn for now, we can always reduce later if/when we want to start building up a SAFU fund.
This is exactly how I feel at the current moment. Too much focus on simply reducing the supply and too little focus on a long term plan to accrue fees to TRU holders. At this point I am probably pretty annoying with my suggestion of a token migration but I truly feel as though it is the best route for TRU token holders. It’s relatively simple and doesn’t involve as much intervention by the team once its been implemented. Investors are justifiably spooked by the total supply and I just don’t see a purpose for having 1.4 billion governance tokens.
In terms of a SAFU fund, doesn’t this effectively mitigate risk for TFI-LP’s? If the fund is implemented I think the protocol needs to increase fees for assuming extra risk.
The current TRU token economics are straight out of a 2017 “standard” ICO playbook (pre-DeFi). The problem is, it’s 2020 and Defi Tokens economics look nothing like this.
When 60% of your outstanding tokens (30% pre-sale, 30% company/team) are centralized, it’s a really tough sell. The product can even be good, but no one will want to invest in the tokens.
I think the “gold standard” for token economics in 2020 is YFI.
YFI had no “company/team” tokens. It was 0%.
YFI distributed 100% of their tokens to people who used their protocol in a fair and distributed manner.
It had no inflation after the tokens were distributed early on. Once the tokens were fully distributed in the first month, that was it. If you wanted it, you had to buy it. There was no more inflation.
I think that’s a very smart way to go. And it shows. Look at what YFI is worth today.