Improve ROOK Token Model

I do not see why, what I am proposing, does not achieve the same objective. In fact, I think aligns much better all stakeholders (team and token holders) by focusing on growing the treasury. Higher the treasury, higher rewards for stakers and healthier the treasury for further investments.

You are considering just as temporary, I think should be considered as an option to compete with your proposal.

Here’s a recording and transcript of yesterday’s Governance Workshop where we discussed this proposal: Governance Workshop - March 8, 2023.

There have been many publicly traded companies trading below book value. For example:

Sprint Corporation was a publicly traded telecommunications company that was acquired by T-Mobile in 2020. Before the acquisition, Sprint was trading at a significant discount to its book value.

As of March 9, 2023, some examples of publicly traded companies that are trading below book value include:

  • Carnival Corporation (CCL), a cruise line operator that has been heavily impacted by the COVID-19 pandemic and is trading at a price-to-book ratio of 0.68.
  • ExxonMobil Corporation (XOM), an oil and gas company that has also faced challenges in recent years and is trading at a price-to-book ratio of 0.86.
  • General Electric Company (GE), a multinational conglomerate that has undergone significant restructuring and is trading at a price-to-book ratio of 1.17.
1 Like

I disagree pretty strongly with this proposal

Adopting a similar solution that redistributes the 10% revenue generated by Keepers would be an organic KPI, connecting the two main actors of the ROOK ecosystem: the keepers and the token holders.

The two main actors of the ROOK ecosystem are not keepers and token holders, they are keepers and users. Legal questions aside, the biggest problem with the old staking model was not low APY or burn rate, it was the fact that staking did nothing to drive protocol usage, while parasitically drawing value away from actual users.

While we believe that incentivization is not a long-term solution and should be treated as a marketing expense to attract users, an incentivized staking mechanism could result in lower token volatility and be a first step in redistributing a portion of the protocol’s value to the stakers.

For the first several months of after the Coordination Game launch, we did basically exactly this. At the time we had a large position in CVX from KIP-5. For a long time, all the yield from the CVX position was used for ROOK buybacks, and the ROOK was distributed to the staking pool to boost APY. This again did basically nothing to drive actual protocol usage.

Orderflow/transaction flow through the coordinator is by far the most important KPI, everything else comes secondary. Any change to tokenomics which does not directly incentivize usage of the protocol makes no sense. Any staking model which distributes value to stakers should do so in a way which requires usage of the protocol. For example, the idea of increasing your own percentage of the bid distribution based on how much you’ve staked has been thrown around in the past.

As a sophon, I will not recommend any proposal to implement a buyback or staking model which results in tokenholders passively drawing value from protocol usage without necessarily participating themselves


The two main actors of the ROOK ecosystem are not keepers and token holders, they are keepers and users
As a sophon, I will not recommend any proposal to implement a buyback or staking model which results in tokenholders passively drawing value from protocol usage without necessarily participating themselves @Pai-Sho

Given that Rook is a DAO-based project, the token and its holders should be central to the architecture of the protocol. As you have pointed out, neither keepers nor users need to interact with ROOK throughout their entire user journey after the implementation of KIP-35. This suggests that Rook could easily transition from a token-based project to an equity-based one.
We acknowledge your concerns, however, as a sophon, we were hoping that you could offer potential solutions to address the main issues raised by us and other community members surrounding the flawed token model and the prevalent negative sentiment among token holders.

After reading the comments, responding to questions, and participating in last week’s Governance call, it seems evident to us that there are clear misalignments between ROOK token holders and management. As reiterated several times, the purpose of our proposal was to shed light on the token’s poor utility after the implementation of KIP-35 and to accelerate any possible discussions regarding future implementations aimed at fixing the current situation.
We understand the need to preserve the treasury, which is essential to ensure the project’s long-term survival. However, it is also true that the current treasury stands at 40 USDM, well beyond the actual needs of the foreseeable future. This presents an opportunity problem, where there’s a need for a clear indication on how capital can be efficiently employed. The tokenomics problems are now evident to us: results are certainly unsatisfactory for the vast majority of token holders and we believe that not using the capital to address these problems is a suboptimal decision. As token holders ourselves, we feel that such a choice, which promotes an ultra-conservative management of capital and does not address a current problem with strong repercussions on the project’s reputation, as demonstrated by the market, which has certainly not rewarded the token in the last year, highlights a significant gap between the interests of the development team and the token holders.

Unless the management demonstrates a genuine commitment to moving towards a model in which the token is pivotal, current token holders won’t be incentivized to hold onto their tokens, and the market won’t have a clear reason to show any interest in the token. In such a situation, we don’t feel there is any further scope to continue our efforts to promote this discussion.

I’m not disagreeing that we’re currently in an awkward situation with the token, it’s been acknowledged repeatedly over the past year. The team members are also down bad on ROOK. But as I said before, securing orderflow should be our primary goal right now. That is not necessarily incompatible with attractive tokenomics in the future, but I don’t think it makes sense to pursue both in parallel, especially not at this stage


Hey id love to get your feedback on this proposal as it accomplishes some aspects of your draft while being better aligned to the DAOs interests and avoids regulatory uncertainty

I really like this idea!

Definitely the most important part of all of this in my opinion as something sustainable needs to be built first and then the tokenomics can be figured out even if it takes some time. Draining the treasury at all without consistent replenishing of it makes no sense. If the community is just patient, I’m confident the tokenomics will get figured out but these things take time to be done well and making sure ROOK is around for a long, long time by acquiring order flow and continuing to innovate really is the most important part at this point.

Yes sure, the treasury is here to support the development of ROOK and compensate contributors who bring value-accrual skills to the DAO. But this doesn’t mean the tokenomics of ROOK doesn’t need to be addressed, especially given its current state and the total lack of attention from the DAO. It sounds ambivalent that DAO members are all trying to protect the treasury that compensates them while the true supporters of the protocol, aka ROOK token holders, have to eat gravel for them.


while the true supporters of the protocol, aka ROOK token holders

please elaborate