SCP-197: rFOX 3.0 Phase 1: Fee-Sharing Structure (Vote 1)

Phase 1: Fee-Sharing Structure (Vote 1)

Summary This vote chooses how ShapeShift DAO will distribute trading-fee revenue under our new Mainnet staking model (55 bps flat on all trades; no FOX discounts; rFOX burn buckets eliminated). Voters will rank four options:

A. Flat 25% of all fees → stakers; DAO retains 75% B. Tiered by Platform Volume (see “Specification” below) C. No Fee Sharing (100% of fees → DAO) D. No change to the current rFOX program (maintain 25%/15%/10% burn schedule) Abstract We’re moving staking from Arbitrum → Ethereum Mainnet, capturing 100% of trading fees into the treasury, and replacing passive token burns with direct staking rewards. This vote picks the fee-sharing paradigm; subsequent votes will set the staking product and ratify the full migration.

Motivation Unified Incentives: Under a flat 55 bps fee with no FOX discount curve, rFOX stakers should earn directly from every trade. Growth Alignment: A tiered structure that re-applies a higher share percentage to all volume once a threshold is crossed gives stakers a powerful incentive to drive platform volume. Simplified Mechanics: A single vote on fee-sharing avoids fragmenting governance decisions and ensures engineering clarity. Community Engagement: Rewarding stakers more as we grow creates a flywheel: higher volume → larger share → more incentives to trade on-shape. Specification Method: Ranked-Choice Voting (Instant-Runoff) on Snapshot Choices (rank 1 → 4): A. Flat 25% of all fees → stakers; DAO retains 75% B. Tiered by Platform Volume Thresholds & Share: 5% once monthly volume ≥ $0 – $5 M 10% once monthly volume ≥ $5 – $10 M 20% once monthly volume ≥ $10 – $20 M 30% once monthly volume ≥ $20 – $30 M 40% once monthly volume > $30 M Whole-Volume Application: When volume crosses into a new bracket, the new percentage applies to the entire month’s volume (not just marginal). Example: If we hit $12 M of volume in a month, stakers earn 20% × (12 M × 0.55 bps) on the full $12 M, not only the $10–12 M slice. C. No Fee Sharing: 100% of fees → DAO treasury D. No change to rFOX: Keep current 25% single-sided / 15% LP / 10% burn schedule Benefits RCV Majority Preference: Prevents vote-splitting between similar options. Stronger Volume Incentives: Tiered whole-volume jumps create a “volume flywheel” – rFOX stakers benefit more as we grow, so they’ll trade, refer, and promote to hit higher tiers. Predictability vs. Growth: Option A offers stability; Option B offers exponential upside. Engineering Certainty: One clear outcome accelerates contract updates, audits, and deployment. Drawbacks Complexity for Voters: Tier mechanics (whole-volume application) require clear communication and examples. Longer Governance: Instant-runoff tallying takes slightly longer than a simple plurality. Potential Treasury Variance: Tiered sharing could reduce DAO take at high volume months. Vote When the Snapshot poll goes live, please rank your preferences:

A. Flat 25% → stakers; DAO 75% B. Tiered by Platform Volume (whole-volume application) C. No Fee Sharing (100% → DAO) D. No change to rFOX program

Thank you for voting!