Ratio Finance Governance
The purpose of this article is to introduce how the governance of Ratio Finance will function. Ratio Finance’s governance will be built on top of Realms, the most popular governance protocol on Solana. The governance of Ratio Finance combines elements of Curve, Votium, MakerDAO, and Serum.
B180RATIO
The first concept that is imperative to understand is that of B180RATIO, powered by Socean. Socean allows protocols to sell their native governance tokens at a discount relative to the market in return for assets of their choice. In the case of Ratio, the Ratio Finance protocol will periodically offer B180RATIO in return for various assets, such as $RATIO, $RATIO/USDC LP, or $USDr/USDC LP.
In a way, B180RATIO is similar to the concept of a single-sided staked token but offers the Ratio Finance DAO more flexibility and benefits. In the case of Realms, it also serves as an effective mechanism for bootstrapping long-term governance. B180RATIO will initially be publicly offered via a Dutch Auction on Socean, and vests daily.
The amount of B180RATIO that SPL Address stakes on Realms will determine what type of service they can request, or proposal that they can make.
It takes at least 5K B180RATIO to make a governance proposal on the Ratio Finance Realms. Having more than this will allow proposal makers to get access to additional services from the Ratio Finance DAO. It is worth noting that if the price of RATIO or B180RATIO increases significantly due to demand, the thresholds for making governance proposals may go down (and vice versa if it gets significantly cheaper).
It is more advantageous for the protocol to accept B180RATIO as its governance structure than pure RATIO, as it requires any entity that wishes to participate in Ratio Finance’s governance via propositions to have a long-term stake in the Ratio Finance protocol.
The Ratio Finance DAO will periodically offer B180RATIO sales for interested individuals, DAOs, and entities that wish to participate in the governance process of Ratio Finance.
Purpose of Ratio Finance Governance
Anyone that has at least 5K B180RATIO can participate in the governance of our protocol by making proposals. It takes a threshold of 10,000 B180RATIO in order for a proposal to successfully pass. Initially, this quorum will only be obtainable by the direct participation of the guardians of the Ratio Finance DAO, the core Ratio Finance team. As more B180RATIO is offered to the public, the quorum threshold will be raised, and the Ratio Finance core team will gradually decentralize ownership and control of the Ratio Finance DAO. In the future, any user will be able to convert their RATIO to B180RATIO at will, via the Ratio Finance frontend.
Although it will initially only take 25K B180RATIO to make a general proposal, the proposal maker may require more staked B180RATIO in order to gain access to additional services from the DAO.
Protocols can participate in the governance of Ratio Finance by making the following types of proposals:
*The Ratio Finance protocol cannot integrate a new form of collateral without doing a risk assessment on it first.
It is worth noting that a proposal maker can combine different types of proposals into one. For instance, a DAO that stakes 150K B180RATIO can request that Ratio Finance conducts risk assessment, collateral integration, and direct $RATIO emissions to the pool of their choice.
A breakdown of the types of proposals that users can make can be found here:
$RATIO Grants
A protocol, individual, or entity may apply for a $RATIO grant for any purpose that advances the utilization or value of the Ratio Finance platform and USDr. Some examples of this might be:
- Educational Material
- Organizing Ratio Finance focused events
- Creating Ratio Finance focused memes
Risk Assessment
Anyone that stakes 50K B180RATIO may ask for the Ratio Finance core risk team to assess the risk of any type of collateral that has not been already assessed. It is worth noting that the respective risk of one type of collateral cannot be assessed without classifying the risk of all other types of assets in its class. For instance, the risk of an individual Solend USDC loan could not be assessed without also assessing the risk of all other stable Solend loans. More information on the Ratio Risk Ratings can be found here.
Collateral Integration
Anyone that stakes 75K B180RATIO can request that a new form of collateral be integrated into Ratio Finance if the risk has already been assessed. It may be common for DAOs or entities to request that the risk of an asset be assessed as well as integrated into the Ratio Finance platform.
$RATIO Emissions
Anyone with 150K B180RATIO can request that a dedicated amount of $RATIO be emitted directly to vaults of their choice on the Ratio Finance platform. For instance, users of USDH might want to request that a certain amount of $RATIO be emitted to the USDH-USDC Saber Vault on the Ratio Finance platform. This would be an on-chain transaction, with the $RATIO being sent directly to the appropriate Rewarder account on the Ratio Finance protocol.
The amount of $RATIO that is devoted to a particular pool would be based on a fixed quantity, but not a linear distribution. This will give emission requestors some form of flexibility in how much RATIO they want to be distributed to a vault and when (i.e 20% APY for one week, 15% APY for two years).
Other
Anyone with at least 5K B180RATIO can make any other form of a proposal. It will be up to the discretion of the Ratio Finance core team (at first) to pass these proposals.
Conclusion
In essence, we wanted to create a governance structure that is easy to understand and that introduces “skin in the game” for Realms governance. If our community has any feedback, please get in touch with us on Telegram or Discord.
Ratio Finance’s mission is to enhance liquidity and De-Risk DeFi, to allow both retail and institutional investors to participate in these novel markets.
Our long-term vision is to be the Risk Rating Agency for all of Decentralized Finance.
