TL-DR: This is part 4 of the DAO restructuring - It introduces Paladin’s new tokenomics centered around revenue sharing and a modular Safety Module. The objective is to align $TREVEE with the growth of Rings and position TREVEE as the most compelling bet on the explosion of the stablecoin economy.
Context:
The Vote Flywheel was originally designed to strengthen Quest’s competitiveness in the vote incentive market. While it contributed to early traction, the system has since plateaued and exposed several inefficiencies. At the same time, Rings has grown into the DAO’s primary revenue engine, reshaping our strategic priorities.
This proposal offers a holistic redesign of token utility and incentives to:
- Simplify the current architecture,
- Increase value accrual to $TREVEE,
- Minimize emissions-related sell pressure,
Reasoning:
Currently the Vote Flywheel has several issue:
- Emission opacity: Emissions currently come from multiple sources (Flywheel, LM, operations), creating confusion for investors.
- High user costs: Voting, LOOT creation, and claiming rewards are expensive.
- Cumbersome listings: The listing system is time-consuming and hard to navigate.
- Excessive granularity: Weekly votes create noise and friction.
- Limited flexibility: The system is not adapted to a cross-chain environment.
Additionally Rings introduces a few additional problems:
- How do we manage collateral allocation, redemption buffers, and protocol risk in a decentralized way?
- How should this growing revenue stream be distributed?
- How can we maintain a competitive staking yield to support $TREVEE?
Solution:
We propose a simplified structure that reflects current DAO realities while preparing for future growth. It combines capital efficiency, risk management, and revenue sharing in a way that is both adaptable and trustless.
1. Revenue Sharing
Starting with the token migration, Rings revenue (net of service provider compensation) will be distributed to token holders. This marks a shift to real yield for $TREVEE holders.
2. Safety Buffer
To reduce systemic risk and ensure scUSD remains fully backed:
- The DAO will build a 2.5% Safety Buffer of the total scUSD supply, enabling 102.5% over-collateralization (in line with Basel III standards).
- Revenue will be split: 50% to the Safety Buffer until the target is reached, and the rest to stakers.
- A Treasury Sale is recommended to accelerate buffer filling.
- Additionally, the DAO will soft-collateralize scUSD with an extra 7.5% reserve in TREVEE, raising total over-collateralization to 110%.
3. Staking with Slashing Protection
Rather than punitive locking, we’ll introduce a stkAAVE-style staking system:
- Stakers gain access to the revenue sharing program for providing security to the protocol.
- In a shortfall event (ie: hack or loss of the scUSD Boring Vault), up to 30% of staked tokens can be slashed.
- This aligns incentives while keeping optionality for users.
- Unstaking will come with a 14 day cool-down.
4. Delegated Governance
To streamline decision-making delegation will be mandatory to receive revenue share (self-delegation allowed).This reduces voter fatigue and encourages proactive governance without compromising decentralization.
5. Emissions via the Reservoir
To accelerate TVL growth 10% of the total token supply will be allocated to a “Reservoir”.
A 0.5% weekly drip (of the Reservoir) will be sent to a designated address (e.g., a Council or Service Provider) for emissions. Over time, this system can evolve into a gauge mechanism in order to further decentralize the emission allocation.
6. Quest Buybacks
Emissions are inherently inflationary. To counteract this all Quest revenue will eventually be used for buybacks in an automated fashion, via a fork of the Euler Fee Flow model. Buybacks increase both token value and effective emissions, tying $TREVEE performance to protocol usage.
Means:
- Develop the Reservoir;
- Adapt Euler Fee Flow to our needs;
- Develop the Staking Contract;
- Launch the Safety Buffer dashboard for transparency.
- 40,000 EUR for development
Voting options:
For / Against / Rework / Abstain
- For
- Against
- Abstain
- Rework