Over the past year, rhino.fi has experienced remarkable growth, reaching over 50,000 weekly active users and 800,000 registered accounts. Our revenue has surged from $10k/month to averaging over $200k/month. And so far we’ve managed to drive this growth and market adoption all without utilising our token, DVF.
Now, as we gear up for the next phase of our growth, we’re considering how we can align DVF and its community of token holders with rhino.fi’s success.
Our goals are simple:
- Ensure the token of rhino.fi accrues real value
- Achieve greater distribution of the token and use it to accelerate the growth flywheel
Some Background
Initially envisioned as the governance token for DeversiFi, DVF has evolved alongside rhino.fi. Today, rhino.fi stands as a multi-chain DeFi aggregator, offering lightning fast bridging to 14 rollups (and counting), yield opportunities, cross-chain swaps, and more.
With most of our operations now off-chain, the governance mechanism provided by DVF is less relevant. The original on-chain protocol, built on StarkEx and offering order-book and AMM trading, generates very little revenue, whereas rhino.fi as a platform is now beginning to generate significant revenue, mainly from cross-chain swap aggregation, yield and bridging.
We want to explore the best ways to leverage DVF’s potential in this new landscape.
Current State of DVF
Distribution:
- 60% held undistributed by DVF DAO
- 27% held by Liquidity Labs
- 13% in public hands (vested or unvested with strategic supporters and community)
One strategic early user airdrop has been deployed, which increased circulating supply by a very small margin, and is included in the 13% of tokens currently circulating.
Governance and Staking
A governance mechanism was built for DVF using the Safe Zodiac module and Snapshot.
Governance has ownership over a large treasury of DVF tokens (over 50% of the supply, as described as the DVF DAO above), as well as a pool of ETH and USDT currently used to provide DAO owned liquidity on Ethereum and several L2s. It also has the ability to mint and burn DVF, and make several adjustments to parameters of the StarkEx based protocol and AMM pool.
DVF can also be staked to receive xDVF. xDVF gives holders voting rights, and also was intended to be where fees would accrue if fees were activated in the protocol.
As it currently stands, no fees were ever activated and distributed to xDVF holders
Proposals for the future of DVF
Some or all of these following proposals could be selected moving forwards, and each should be considered ‘standalone’.
How to feedback:
Read through the following proposals and share your thoughts in our dedicated discord channel. Please use the numbers & titles when adding comments in discord, ie ‘I had some thoughts about ‘1.Migrating DVF to RHINO’. Feedback can be shared until 30.11.2023. We’ll then move the most popular proposals to a vote in our snapshot.
1. Migrate DVF to RHINO
Explore a seamless one-way migration from DVF to RHINO, offering a 1:1 ratio swap. There would be no time limit and could be done at the discretion of holders.
Vested tokens (i.e. those held by team and investors) would not be able to migrate to RHINO until their vesting had completed.
DAO-owned liquidity for DVF would also migrate to RHINO, and new markets seeded on Uniswap V3, rhino.fi, and other markets where the DAO currently holds liquidity.
2. Implement a Buy and Burn Mechanism
Activate a buy and burn mechanism linked to rhino.fi revenue. This buy and burn would begin to be active when monthly revenue is greater than $300k / month. This will ensure it will be above the level of monthly expenses for Liquidity Labs, ensuring sustainable growth without compromising our vision.
– Below $300k revenue no buy & burn
– Between $300k and $600k of revenue, 10% of revenue is used for buy & burn
– Between $600k and $1M of revenue, 25% of revenue is used for buy & burn
– Above $1M of revenue, 50% of revenue is used for buy & burn
Some examples of how this would look:
During 2023 the average monthly revenues for rhino.fi were ~$150k. This means that a growth of 2x is required to activate the buy & burn consistently. In peak months such as October and November this threshold was already surpassed, making this is therefore a very achievable goal, and particularly if market conditions improve the buy & burn will quickly become very significant. At a monthly revenue of $1M, the buy & burn value each month would be $130k, or ~2% of the current DVF circulating supply each month. xDVF and staking would not be used in this buy and burn mechanism. The xDVF staking would be deprecated in order to simplify the mechanism and make it clearer to token holders.
Legal & Regulatory Challenges
Addressing legal concerns around buy & burn (or any mechanism that ties rhino.fi revenue to DVF), we’ll design the mechanism carefully, leveraging industry expertise.
3. Alternative Fee Distribution to Stakers
Alternatively, distribute a proportion of the fees to staked DVF/RHINO holders. This focuses on rewarding long-term commitment to rhino.fi and its growth, and active participation by token holders.
A staking mechanism would have a 30 day lock up in order to be eligible to receive fees in ETH. These fees would then be distributed to staked token holders allowing them to claim them from a contract monthly. Similar thresholds for the amount of fees distributed could be set as in the buy & burn, but directly distributing the fees instead of using them to buy and burn the token.
4. Transferability Freeze & Re-Launch
Temporarily freeze DVF/RHINO for 6-12 months, focusing on enhancing token distribution. Following thoughtful distribution mechanisms, a decentralized vote will reactivate transferability and restore DAO-owned liquidity. Imagine a grand re-launch, with your input steering the way.
Currently there are around 7,500 holders of DVF across rhino.fi and on Ethereum L1, but only ~2000 of these have a balance over $20 in value. This proposal is to freeze DVF/RHINO and relaunch it in 6-12 months after significantly improving the distribution of tokens.
An example of how this would work:
Remove liquidity for DVF/RHINO and make RHINO temporarily not transferable for a period of 6-12 months.
During this time, there would be several mechanisms to distribute DVF/RHINO to aligned members of the user community, focusing on rhino.fi’s current and future active users.
Set an objective of distributing part of the DAO owned token supply, in order to have at least 10k holders of DVF/RHINO owning at least 100 tokens each.
A decentralized governance vote of those existing and new holders would then make the token transferable again in the future, and add DAO owned liquidity back to the DEX markets, once the holders felt that the token was widely distributed enough.
This would be equivalent to a ‘re-launch’ of the token, and could be coupled with other proposals such as the conversion of DVF to RHINO, and the initiation of the buy & burn mechanism. The 6-12 month freeze would also allow overall crypto market conditions to continue to improve, and mean that during the period of increased token distribution to new holders there is no market price.
5. Burn 50% of Supply
Burn a significant portion of the DVF DAO owned undistributed liquidity to reinforce our commitment to existing holders. While it is intended to improve the distribution of DVF by distributing more tokens over the next 6-12 months, this will never approach the level of dilution for existing holders.
Burning 50% of the total supply would leave the DAO with 10% of the total supply which could be used for liquidity provision or distributed in future.
6. Enhancing Utility for Token Holders
Add enhanced utility to DVF/RHINO, including free bridge transactions, boosted yield opportunities, priority airdrops, referral schemes, and more, creating value for both new and existing users.
Do you have any ideas on what these should be? Add them in our dedicated discord channel.
What’s next for DVF?
rhino.fi and DVF stand at a unique crossroads. With our user-centric approach, low circulating tokens, and substantial revenue, we have the flexibility to shape a promising future. Your feedback is instrumental in making this vision a reality.
We invite all DVF holders and rhino.fi users to share your thoughts before November 30th, 2023. Read through the above proposals and share your thoughts in our dedicated discord channel.
Please use the numbers & titles when adding comments in discord, ie ‘I had some thoughts about ‘1.Migrating DVF to RHINO’.
Feedback can be shared until 30.11.2023. We’ll then move the most popular proposals to a vote in our snapshot.
