this is very interesting. Sharing here some thoughts.
IMO There are two ways to calculate the revenue sharing SD should have:
Top-down would be to choose it based on % number vs a benchmark of what other protocols do. Let’s see:
75% of protocol revenues collected by the protocol will be distributed to veBAL holders.
The other 25% of the fees will be kept by the DAO treasury as a reserve.
Every time a trade takes place on Curve Finance, 50% of the trading fee is collected by the users who have vote locked their CRV.
GMX is a decentralized perpetual exchange.
When staking GMX, 30% of the revenue is paid to GMX stakers.
Synthetix is a decentralized finance protocol that provides on-chain exposure to a wide variety of crypto and non-crypto assets.
yield. The company shares up to 100% of the revenue with the stakers.
Dopex is a decentralized options exchange on Arbitrum
70% of the fees go back to the liquidity providers, 5% to delegates, 5% to purchasing and burning the protocol’s rebate token rDPX, and 15% to DPX single-sided governance stakers.
Gains Network (GNS)
Gains Network is the decentralized protocol behind the perpetual and leveraged trading platform gTrade.
In total, 40% of the fees from market orders and 15% from limit orders are allocated to GNS single-sided stakers.
Another Arbitrum protocol, Umami is a market maker and liquidity provider that helps partner protocols rapidly scale their liquidity.
By depositing one’s Umami for mUmami, holders can earn 6% APR, denominated in WETH, from Umami’s treasury and protocol revenue.
“Each $UMAMI token represents a fixed claim on Umami’s governance and protocol revenues,” states its tokenomics page. “It can never be diluted away by inflationary emissions or capital raises.”
Top Down Conclusion
30% GMX, 50% CRV, 75% BAL, 100% SNX and others…
Bottom up would be to work our way to a revenue sharing % by understanding"
- how much is Stader’s ARR at current TVL
- what % of SD token is likely to be staked
- SD token price
- circulating supply
These factors impacts the final APR % that the end user will see.
(we could, again, benchmark that APR % with what other Real-Yield protocols are having).
Example, dummy numbers:
- 2 million ARR.
- SD token price 0.40 and circulating supply is 10 million, putting mcap at 4 million.
- 50% of the SD tokens will get staked.
In that case, the APR will be (2 million * % revenue sharing given) / (50%* 10 million * $0.40) .
APR = 2,000,000*RSR / 2,000,000 → APR = RSR.
With those paameters, APR would be equal to the Revenue Share offered. I consider that, if paid in stablecoins, anything 10% or above is an incredible yield, especially given the fct that staking is a very stable business model. Nowhere you would find a “dividend aristocrat” stock giving you 10% dividend.
Ofc, on what I just did is important to do a sensitivity analysis and see how the APR evolves as the 4 parameters outlined above evove (e.g price fluctuation, more tokens get unlocked, etc etc)