Imagine I would make a change to the SOV token and staking, in gradual small steps, to help you see the immense value that going tokenless might give you. First step: you need to add a little rBTC to your stake as well, to obtain revenue, so now it is only the rBTC+SOV that earns you a share of the revenue. Second step: I rename ‘SOV’ to ‘multiplier’. Instead of saying that the SOV+rBTC earns you revenue, I say that the rBTC earns the revenue but the ‘multiplier’ beefs up your share of the revenue to exactly what it is now. No real change, just relabeling and reframing things. Now the third and crucial step: I announce that the ‘multiplier’ will become super rare and hard to get, namely: it will no longer be tradable, you can only earn it over time (and as you have it already, you are guaranteed to be ahead of others). This means that your share of the revenue becomes protected and very rare, and hence has become way more valuable. Only if revenue goes up like crazy does it become attractive for others to start staking. You have effectively become immune to SOV dumping and others buying it, thereby diluting your share of the revenue (and the dropping value of your SOV). This is the value proposition to you: you still get an outsized share of revenue, but as early investor you receive protection against downside risk, and against dilution of revenue. (Note: anyone who thinks I propose this because I’m a raving bitcoin-maxi, is not reading carefully or charitably, and creating a clear straw man. I make no appeal to any bitcoin-maxi argument. That you need a token to coordinate around is a shortsighted crypto dogma, one coordinates around incentives and risks themselves, not the vehicles in which these come. On the proposed picture you have incentives and risks. If you want an example of a protocol working with a revenue multiplier, look at GMX).
Ok, now there is one thing that is no longer possible when Sovryn goes tokenless and I think is secretly on the mind of people opposed to this idea: namely SOV going 100x. Here is the thing, I don’t think that is possible, not at least with the current design; I don’t like to go into this aspect of the story much because it sounds like fudding, but here goes anyway. The SOV token gives two things: a vote on SIPS and an APR. There is no value to SOV on top of these two things. Focus on the APR. The special thing about Sovryn is that the APR comes in rBTC. This creates a floor price (why? because as SOV dumps, the APR goes up relative to the decreasing value of SOV, even when revenue stays equal). That’s nice, but the mechanism also creates downward pressure (if SOV goes up against BTC, APR with respect to SOV goes down). As there is nothing other than the APR that gives SOV value in the current design, SOV just cannot pump, except for irrational pure speculation (which we saw initially, and from which we have finally come down brutally). With the current mechanism, there is not just a strong floor to SOV’s price, there is an equally strong ceiling to SOV’s price. True, going tokenless gives up the possibility of riches through a crazy pump, but if you see things clearly, that is currently not really a realistic possibility by design, so it is not a cost of the proposal. Going tokenless would in fact immensely increase the value for early investors, and it would fit with all conceptions of Sovryn.
Now what would undermine this argument is if the design was changed to allow SOV to pump by giving it utility beyond share of revenue; hence the other option I propose. The way I see it, the way forward lies with either of the two routes. To me, speaking both as general crypto enthusiast, as investor, and as a Sovryn, going tokenless is by far the most interesting of the two options. (The reason: what pumps up must come down, when one starts going down the utility route, one needs to continue adding utility on ongoing basis, there is a worry that this is not long term viable; but that depends on devs and their creativity).