SCP-198: rFOX 3.0 v2 Burn Notice
Summary
This proposal updates the rFOX program (rFOX 2.0 v2) on Arbitrum to directly distribute 25% of ALL Shapeshift revenues in USDC to participants, introduces a targeted FOX token buyback and burn at a monthly volume threshold of $200M, and removes the existing general burn mechanism.
Abstract
The proposal simplifies and enhances the existing rFOX program by directly rewarding users with USDC and introducing a targeted FOX buyback and burn mechanism activated at high trading volumes. This aims to increase market impact, simplify user experience, and strengthen community engagement.
Motivation
The current rFOX system needs an update. Currently, it includes regular burns irrespective of trading volume, resulting in minimal impact and ineffective capital usage. By restructuring fee distribution and focusing the burn mechanism on achieving a substantial volume milestone, this proposal maximizes FOX token economics and provides clear, measurable objectives for the community.
Specification
- Fee Distribution: 25% of all Shapeshift revenues earned by the DAO are distributed monthly as USDC directly to individual Thorchain addresses of rFOX participants.
- Targeted Burn: When monthly trading volume reaches $200M, 50% of the DAO-owned revenues (75% of total revenues) will be used to buy back FOX tokens for burning.
- Removal of General Burn: The ongoing general burn approach will be eliminated in favor of the targeted burn strategy described above.
Benefits
- Zero Additional Engineering: Easy implementation with minimal resources.
- Expanded User Base: USDC rewards incentivize current and new participants.\
- Expanded Reward Base: 25% of all fees generated on shapeshift > just 25% of thorchain (rune) fees.
- Simplified Messaging: Clear and concise reward and burn strategy.
- Enhanced Platform Engagement: Promotes user activity within the ShapeShift ecosystem. Reinforces the use of a shapeshift wallet (to link 0x and thorchain address)
- Community Goal Alignment: Sets a clear, unifying target to galvanize collective action and potentially boost FOX market performance.
Drawbacks
- Dependent on Trading Volume: Benefits from the targeted burn only activate upon reaching substantial trading volume ($200M monthly), which may not always be predictable.
Vote
- For: Adopt the revised rFOX 3.0 v2 program with direct USDC rewards and targeted burn mechanism.
- Against: Keep the existing rFOX program unchanged.
- For (with changes): I like it, but I don't like this about it: _____ (insert in forum, please!)
Revenue and Burn Impact
| Monthly Volume | Fees (55 bps) | rFOX Share | DAO Retained | Burn | FOX at $0.04 | FOX at $0.10 | FOX at $0.04 (% of total supply after 12 months) |
|---|---|---|---|---|---|---|---|
| $50,000,000 | $275,000 | $68,750 | $206,250 | $0 | 0 | 0 | 0% |
| $100,000,000 | $550,000 | $137,500 | $412,500 | $0 | 0 | 0 | 0% |
| $150,000,000 | $825,000 | $206,250 | $618,750 | $0 | 0 | 0 | 0% |
| $200,000,000 | $1,100,000 | $275,000 | $412,500 | $412,500 | 10,312,500 | 4,125,000 | 12.38% |
| $250,000,000 | $1,375,000 | $343,750 | $515,625 | $515,625 | 12,890,625 | 5,156,250 | 15.47% |
| $300,000,000 | $1,650,000 | $412,500 | $618,750 | $618,750 | 15,468,750 | 6,187,500 | 18.56% |
Key Performance Indicators (KPIs)
| KPI | Definition | Success Criteria |
|---|---|---|
| Monthly Trading Volume | Monthly volume traded through ShapeShift | Success: $150M/month; Smashing Success: ≥ $250M/month; Failure: < $100M/month for 3 consecutive months |
| FOX Buyback and Burn | Impact on circulating FOX supply (1B total supply) | Success: Decrease by ≥10% annually after first burn; Failure: <10% annually after first burn |
| 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 unique addresses receiving USDC rewards | Success: ≥50 monthly; Smashing Success: ≥100 monthly; Failure: <35 monthly for consecutive quarters |
| Staked FOX Tokens | Percentage of circulating FOX tokens staked | Success: 10%; Smashing Success: 15%; Failure: <10% sustained |
| ShapeShift Wallet Usage | ShapeShift wallet usage following rFOX distributions (Mixpanel) | Success: ≥50% activity rate within 7 days; Failure: <25% sustained for 3 distributions |
| Staker Retention Rate | Percentage of users who continue participation | Success: ≥30%; Smashing Success: ≥50%; Failure: <20% for two quarters |
| FOX Price Impact Post-Burn | FOX token price appreciation 30 days after burn event | Success: ≥10%; Smashing Success: ≥20%; Failure: ≤0% sustained after multiple events |
Off-Chain Vote
For
1.45M FOX12.9%
Against
0 FOX0%
For (with changes)
9.79M FOX87.1%
Discussion
Timeline
May 22, 2025Proposal created
May 22, 2025Proposal vote started
May 29, 2025Proposal vote ended
Jun 10, 2025Proposal updated