ETH as Fee Token for SafeStake Protocol -- Community Governance / Token Utility

Proposal Overview:

This proposal recommends transitioning the SafeStake protocol fee token from DVT to ETH, due to DVT’s low liquidity and a current token price that does not reflect the true value and progress of the SafeStake ecosystem.

The existing fee structure, which requires validators to use DVT, creates friction in onboarding and limits participation due to limited exchange access and volatility. By moving to ETH—a widely accepted and liquid asset—we aim to reduce barriers for new validators and align protocol operations with standard Ethereum-native practices.

This shift will streamline validator onboarding, lower interaction costs, and ensure the protocol can operate efficiently as adoption grows. Long term, the protocol will use ETH-based revenue to buy back DVT from the open market, creating ongoing demand for the token and reinforcing its value.

This change is aligned with SafeStake’s mission of making Ethereum staking scalable and accessible through DVT, while maintaining strong token-based governance and incentive models.

Key Points:

1. Replace DVT with ETH as the protocol’s fee token
2. Reduce operational friction for new and existing validators
3. Use protocol-generated ETH revenue to buy back DVT
4. Maintain DVT's long-term utility for governance and incentive alignment

Motivation:

1. Liquidity Constraint: DVT currently lacks deep liquidity on exchanges, making it difficult to acquire and use as a fee token.
2. Price Misalignment: The current market price of DVT does not reflect the underlying growth or protocol adoption.
3. User Friction: Validators prefer ETH-based interactions; requiring DVT adds unnecessary complexity and onboarding cost.

Implementation Plan:

1. Submit the proposal for community governance voting for one week.
2. Update the fee module to accept ETH instead of DVT for validator-related operations after the proposal get approval.
3. Monitor revenue generation and initiate ETH-based DVT buybacks once protocol revenues become sustainable.
4. Provide quarterly updates to the community on buyback activity.