Summary
This SIP ratifies and formalises the Exchequer Committee’s decision, announced on 17 February 2026, to temporarily redirect RBTC and ZUSD protocol revenue from staker distributions to the Exchequer treasury. It affirms that this measure is temporary, establishes an ongoing review framework, and sets the explicit goal of resuming — and ultimately maximising — revenue distributions to stakers as soon as conditions allow.
Background
On 17 February 2026, the Exchequer Committee announced a temporary pause of RBTC and ZUSD staking payouts, citing compressed treasury runway following the decline in BTC price. Distributions of BOS, SOV, MYNT, and OSSOV rewards were unaffected. Revenue already accrued remained available for withdrawal.
The Sovryn Financial Report covering Q4 2024 – Q4 2025 disclosed the following:
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Average monthly operational burn during 2025 was approximately $274K, reflecting elevated spend on Origins development, Sovryn Layer, technical debt reduction, and settlement of prior-period liabilities.
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The treasury balance stood at approximately $736K as of 31 December 2025, with a projected balance of approximately $395K by the end of Q1 2026.
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A series of headcount reductions between November 2025 and February 2026 reduced the steady-state monthly burn to approximately $45–50K from April 2026 onward — an approximately 84% reduction.
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Without revenue injection to the treasury, the protocol would not be sufficiently capitalised to ensure continued operations.
The decision to redirect revenue was taken by Exchequer under the authority delegated by SIP-0015, which established the Exchequer Committee and granted it discretion over treasury management within bounds approved by Bitocracy. While the decision falls within Exchequer’s delegated operational mandate, its significance to stakers warrants formal ratification by Bitocracy.
Motivation
This SIP seeks to:
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Ratify the temporary redirection.
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Bound the measure in time and scope so that stakers have clarity on its temporary nature.
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Establish a review cadence so that the redirection does not persist by inertia.
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Affirm the goal of resuming and growing staker revenue distributions.
Proclamation
Bitocracy hereby resolves as follows:
1. Ratification
Bitocracy ratifies the Exchequer Committee’s decision of 17 February 2026 to temporarily redirect RBTC and ZUSD protocol revenue from staker distributions to the Exchequer treasury for the purpose of funding protocol operations.
2. Temporary Nature
This redirection is explicitly temporary. It shall remain in effect only for so long as the Exchequer Committee determines it is necessary to maintain adequate treasury reserves for protocol security and operational continuity, subject to the review process described below.
3. Ongoing Review
The Exchequer Committee shall review the revenue redirection on a quarterly basis at minimum, with the first review to be completed no later than the end of Q2 2026. Each review shall consider:
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Current treasury balance and projected runway at prevailing burn rate.
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Protocol revenue trends (monthly and quarterly).
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Progress toward the revenue targets described in Section 4.
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Any material changes to the operational cost base.
The Exchequer Committee shall publish a summary of each quarterly review to the Sovryn forum, including the treasury balance, the preceding quarter’s revenue and expenditure at a category level, and its determination on whether the redirection should continue, be partially unwound, or be fully unwound.
4. Path to Resumption
The explicit goal of this measure is to create the conditions under which protocol revenue can be redirected back to stakers. The Exchequer Committee is directed to work toward resuming staker distributions as rapidly as is consistent with maintaining a prudent treasury reserve.
The Exchequer Committee should target a treasury reserve sufficient to cover a minimum of six months of steady-state operational costs. Once the treasury meets this threshold and the Exchequer Committee is satisfied that ongoing revenue sustainably exceeds ongoing costs, it should begin partial or full resumption of RBTC and ZUSD staker distributions, subject to a further SIP or Exchequer determination as appropriate.
Additional revenue streams — including those anticipated from the Sovryn Layer — should accelerate this timeline.
5. Staker Protections
Nothing in this SIP alters the right of stakers to withdraw revenue that accrued prior to the redirection taking effect. BOS, SOV, MYNT, and OSSOV distributions that were not paused shall continue unaffected.
6. Bitocracy Authority
Bitocracy reserves the right to amend or revoke the authorisation granted in this SIP at any time by a subsequent SIP. Nothing in this SIP expands the Exchequer Committee’s authority beyond what was granted by SIP-0015 and subsequent governance actions.
Rationale
A proclamation is the appropriate track because this SIP does not modify smart contract code, issue tokens, change parameters, or directly transfer treasury assets. It makes a governance statement ratifying an operational decision, establishing conditions and expectations around it, and affirming the path forward.
The quarterly review cadence balances the need for accountability with the practical reality that treasury and revenue conditions do not change week-to-week. The six-month reserve target provides a concrete benchmark without being so aggressive as to indefinitely delay resumption.
License
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