ShapeShift

Summary

This proposal updates the rFOX program (rFOX 2.0 v2) to launch rFOX 3.0 v3: Simple 25% rewards 5% burn, keeping everything on Arbitrum. It distributes 25% of all ShapeShift DAO revenues in USDC to FOX stakers on Arbitrum, sent directly to their staking EVM addresses. It also introduces a simple, 5% burn mechanism based on monthly fees earned by the DAO.

Abstract

This proposal replaces the flat, volume-triggered burn and Thorchain-based mechanics with an all-Arbitrum design that rewards FOX stakers in USDC and simplifies FOX buyback-and-burn.

Motivation

The existing rFOX program relies on Thorchain address mapping and includes a burn of just 15% of RUNE fees that go to the treasury. This proposal removes the complexity and weak incentives by:

• Migrating entirely to Arbitrum and EVM-native FOX staking addresses.
• Replacing the existing 15% burn of RUNE with 5% of all Revenue.
• Distributing 25% real revenue in the form of USDC to users who staked FOX.

This redesign offers clarity, incentives, and streamlined implementation.

Specification

• Chain: Arbitrum only. No Thorchain address linkage or distribution.

• Reward Distribution:

  • 25% of all ShapeShift DAO revenues are distributed monthly in USDC to FOX stakers on Arbitrum.
  • Rewards are sent directly to the EVM address used to stake FOX.

• Change to existing Burn:

  • The current ongoing general burn is changed to be from 15% of all RUNE to 5% of all Revenue.

KPIs

Key Performance Indicators (KPIs)

KPI	Definition	Success Criteria
Monthly Trading Volume	Monthly volume traded through ShapeShift	Success: $100M/month; Smashing Success: ≥ $150M/month; Failure: < $50M/month for 3 consecutive months
FOX Buyback and Burn	Impact on circulating FOX supply (1B total supply)	Success: Decrease by ≥1% during any quarter; Failure: Decrease by <1% during all quarters
USDC Distributed to Users	Monthly total USDC rewards distributed	Success: ≥$40K/month; Smashing Success: ≥$80K/month; Failure: <$25K/month for 3 consecutive months
Unique rFOX Participants	Number of new unique addresses receiving USDC rewards	Success: ≥35 monthly; Smashing Success: ≥75 monthly; Failure: <35 monthly for consecutive quarters
Staked FOX Tokens	Percentage of circulating FOX tokens staked (currently 4.7%)	Success: 10%; Smashing Success: 15%; Failure: <10% sustained
Staker Retention Rate	Percentage of users who continue participation MoM	Success: ≥40%; Smashing Success: ≥60%; Failure: <30% for two quarters
Staker Re-staking Rate	Percentage of users who stake (>10% of original stake) again within 3 months	Success: ≥20%; Smashing Success: ≥40%; Failure: <10% for two quarters

Benefits

• Simplified Infrastructure: No need to link 0x and Thorchain addresses. Arbitrum-only means lower costs, reduced friction.
• Real Revenue to Users: USDC rewards > RUNE rewards. Tangible value to FOX stakers.
• Simplicity Incentives: Aligns FOX burn with monthly revenue in an easy to digest way.
• Stronger Messaging: Clean and clear: stake FOX, earn USDC, help burn FOX.
• User Growth Potential: Revenue share across all protocols (not just Thorchain) widens appeal and strengthens reward base.

Drawbacks

• Burn is wasteful: No evidence a buyback and burn does anything.
• Arbitrum-Only Limitation: Non-Arbitrum users must bridge or miss out.

Vote

• For: Adopt rFOX 3.0 v3 on Arbitrum with direct 25% USDC rewards and flat 5% FOX burn monthly.
• Against: Maintain the current rFOX program with Thorchain addresses and fixed burn logic.