$REZ Staking Analysis & Thoughts on Future Incentive Alignment
Roughly 3 weeks ago, @RenzoProtocol introduced staking for their REZ token
Since then 73m $REZ ($12m) has been staked, representing 6.64% of the entire circulating supply
The program itself has gotten 3,260 new users since the launch.
In those 3 weeks, the staking contract has become the 4th largest holder of REZ. This supply sink creates an interesting supply dynamic -- while the main driver right now is point boosting (see official outline in tweet screenshot below), a staking contract could make sense for ensuring better protocol<>user alignment in the future
When we reflect on Lido's growth story, they executed extremely well, but there was certainly an alignment mismatch between stETH holders (users) and LDO holders (DAO governors) - they're attempting to mend this misalignment with their dual token governance model (see flow chart below via @marginxsafety's Lido forum post )
With Liquid Restaking Tokens like ezETH having greater complexity than LSTs, the REZ staking contract, with its 7 day cool-down period could allow for better protocol governance incentives to be drawn out while the project is still in its nascent stage.
The REZ token distribution and ezETH distribution are quite different as it stands today given structural differences - therefore it may make sense to implement mechanisms to better align the risks and goals associated with the tokens respectively, especially when considering future supply unlocks.
We look forward to diving deeper into specific mechanisms that could create sustainable incentive alignment for @RenzoProtocol at large!
h/t to @Jonaso_eth for the data via @flipsidecrypto
Roughly 3 weeks ago, @RenzoProtocol introduced staking for their REZ token
Since then 73m $REZ ($12m) has been staked, representing 6.64% of the entire circulating supply
The program itself has gotten 3,260 new users since the launch.
In those 3 weeks, the staking contract has become the 4th largest holder of REZ. This supply sink creates an interesting supply dynamic -- while the main driver right now is point boosting (see official outline in tweet screenshot below), a staking contract could make sense for ensuring better protocol<>user alignment in the future
When we reflect on Lido's growth story, they executed extremely well, but there was certainly an alignment mismatch between stETH holders (users) and LDO holders (DAO governors) - they're attempting to mend this misalignment with their dual token governance model (see flow chart below via @marginxsafety's Lido forum post )
With Liquid Restaking Tokens like ezETH having greater complexity than LSTs, the REZ staking contract, with its 7 day cool-down period could allow for better protocol governance incentives to be drawn out while the project is still in its nascent stage.
The REZ token distribution and ezETH distribution are quite different as it stands today given structural differences - therefore it may make sense to implement mechanisms to better align the risks and goals associated with the tokens respectively, especially when considering future supply unlocks.
We look forward to diving deeper into specific mechanisms that could create sustainable incentive alignment for @RenzoProtocol at large!
h/t to @Jonaso_eth for the data via @flipsidecrypto
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