Fundamental change needed in SOV token to secure future funding

That’s why I would support such SIP. Whether the extra income is used to burn SOV or increase the treasury is a secondary decision for me.

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With my SIP-51 i was very hesistant to touch Zero. But like almost everyone here i agree with your argumentation and i think that Sovryn is in dire need for additional revenue generation.
20 months of runway is not a long time and solutions should be presented as soon as possible.
We have seen several community driven proposals around this topic.

I have yet to see a detailed plan and more importantly, ANALYSIS, from the exchequer that’s not just talk.


Thanks @Bjorn for moving this conversation forward.

The argument for a) seems sound. I would vote in favor of a).

Regarding b) and c) it is unclear to me if this is the best strategy, due to the fact that we’ll eventually have to dump it to fund operations and limit the fundamental value accrual.

The options regarding what to do with the income from a) would be:

  1. Redistribute everything to stakers (–> increase in SOV fundamental value)
  2. Implement a repurchasing programme like b)&c) (–> higher price but unchanged fundamental value)
  3. Balance between 1 and 2.

Regarding option 2:
Although introducing a supply shock (medium term, until we need to fund operations) would logically increase price and exacerbate price move in a bull run, I remain unconvinced that the price would relevantly and sustainably move up without a bull market. Thus b) and c) feels like betting on a new bull run before the treasury runs dry.

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As argumented in this forum: SOV token is behaving as an ordinary share and is also valued as an ordinary share. If only a) is implemented, this doesn’t change.

If also b) and c) are implemented there will be other impacts on the valuation, as shown in my last post.

Constant buying of SOV tokens from the highly priceinelastic SOV/rBTC pool, reduces supply of SOV tokens (locked up in Development/Adoption fund) and generates constant buy pressure.

This SOV/rBTC pool is very price inelastic. As shown in updated chart below.

Total marketcap of Tether, USD Coin and Binance USD is at the moment 133 billion, in a bear market. If an investor expects ZERO to generate 0,35 billion in loans a total amount of 1,75 mio USD (appr. 105 BTC) is used to buy SOV tokens, if b) and c) are implemented.

Without any additional inflow of SOV tokens in the pool the price would move from 0,23 USD to 2,46 USD and a total of 2,3 mio SOV tokens would have been taken off the market. In practice there will be inflow of SOV tokens in the pool, so the price increase will be less, however the amount of SOV tokens taken off the market will be higher, impacting valuation.

My concern with only implementing a) is it will not be sufficient to significantly increase the price of the SOV token as current fees are still so low.


Disagree a 1% fee is a huge turn away as a Zero user myself. I will just go to FUJI money on Liquid sidechain (basically another bitcoin backed loan protocol) who charge a one time fee of 0.75% which has no token.

Thank you for your reaction Bitcoinskeptic.

We have to decide how we are going to compete with competitors also offering bitcoin backed stablecoins. And I think if ZERO is succesfull we can expect also new competitors entering this space.

Are we going to compete on fee, or do we differentiate ourselves from competitors?

If we chose to compete on fee, this could result us being stuck in a race to the bottom with very low fees, resulting in low value of the SOV token and problems to fund our operations.

Imo we should aim to differentiate ourselves from competitors.

We should communicate clearly we charge a fee to fund our operations, as we want to keep the platform save and reliable, develop the platform, offering other products next to stablecoins, invest in our community, etc, etc.

Trust in the protocol will be the main hurdle to adoption, not paying a one-off fee of 0,5% or 1,0%.

But sure, some users will only look for the lowest fee possible and choose to go to a competitor.


for small loans a 1% originating fee is acceptable. For big accounts(millions) is a huge no, no.

double the fees is not the best idea + zero is not even public yet.
Increasing/decreasing fees should be a subject better discussed a year or two from now, when we have an idea how the product behaves and how the users interact with it


Isn’t he origination fee paid only at the opening of the credit line - with minimum 200$ ? Can’t we open a credit line with 200$, pay 0,5% x 200$ + 20$ liquidation fee, and then add infinite rBTC for free?

That is not how it works, it is not exactly a 1 time fee as you explain it. You can add as much btc as you like, but if you increase your 200$ loan to say 1000$, you will pay an additional origination fee for the newly minted 800$ (800$ * 0.5%= 4$) on top of the 1$ you paid at the beginning.

Anyway, we need to have a proper discussion and summary of how Sovryn is going to extend its runway. I doubt that raising the Zero fee to 1% will do, especially with competitors alreay available.


Revisiting a plan the community was completely against after wasting a year building out other sub tokens is surely completely counter productive. Therw was a very strong no vote against launching more shitcoins. And now after another year of not leaving alpha you want to loop back to that??


actually the majority were in favour of sub-protocols. Origins and Mynt had an overwhelming yes vote in favour of sub-daos

I believe there was an overwhelming vote against zero and origins hence the tokens currently not existing.

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maybe you should revisit the actual governance vote on both, because what you write is actually false

Perhaps i am mistaken, why were the sub protocol origin and zero scrapped if community was in majority favour?

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that is a very good question

Mises regression theorem. Value of money can be traced back to its value as a commodity.

Satoshi understood this which is why dollar parity for btc didn’t happen until many months after the first block.

Those fearful for creating a utility for SOV fail to understand first principles. Creating utility is exactly what SOV needs if this project is going to survive.

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I fully agree with Sacro.

This forum started with a concern about securing funding in 20 months time. And several proposals have been discussed.

I would like to know what the position of Exchequer is on this topic and what the plan is to secure funding in 20 months time.


Because Sovryn isn’t a democracy: nor should it be.

I would argue that if sips are put to vote and it passes the the result should be respected and not trivially cancelled. In this scenario the stokers were blindsided and this is shady and despicable imo

Because the community then wasn’t majority in favor. Back then many members came from BCW, which were all of the opinion, that token bloat is bad and that SOV should be the token for everything in the Sovryn ecosystem. At least in the beginning phase. This would give SOV more and more value over time, which then reflects in token price. I myself come from BCW and am still part of it. And I agree with this line of argumentation. For SOV and Sovryn to succeed, SOV needs to be in the center of everything we’re doing.

But this is only my opinion and I am certainly not the smartest guy in this community. So if there are good arguments for separate tokens for each sub protocol, I am all ears.