Simple Summary
Increase the portion of protocol fees allocated to DRV buybacks from 25% to 35%, reduce staking rewards from 250,000 DRV per week to 100,000 DRV per week, and reduce the unstake period from 28 days to 7 days.
Abstract
The current staking settings were established for an earlier phase of the protocol and are now overly generous relative to the protocol’s current needs. This proposal updates three components of the DRV incentive framework.
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First, it increases the share of protocol fees allocated to DRV buybacks from 25% to 35%.
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Second, it reduces staking emissions from 250,000 DRV per week to 100,000 DRV per week, which reduces annualised staking rewards from approximately 3.8% to approximately 1.5%, based on current assumptions.
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Third, it shortens the unstake period from 28 days to 7 days.
Together, these changes are intended to reduce unnecessary emissions, improve capital efficiency, and make staking more flexible for token holders.
Context and Objectives
The protocol’s staking emissions are currently too high and the unstake period is longer than necessary. At the same time, a greater portion of fee generation can be directed toward buybacks.
This proposal is intended to better align incentives with the current stage of the protocol by reducing token outflows from staking rewards, increasing fee-supported buybacks, and lowering the friction for stakers who want to exit. The combination should create a more efficient and sustainable staking framework while preserving the utility of staking for token holders.
Specification
The DAO resolves that Derive Subsidiary (BVI) Ltd, and where required Derive Foundation and its affiliates, shall take all actions necessary to implement the following changes, including any required board approvals and onchain or offchain actions.
1. DRV Buybacks
The share of protocol fees allocated to DRV buybacks shall be increased from 25% to 35%.
This change shall apply to the existing buyback programme and any related treasury or operational processes required to give effect to the revised allocation.
2. Staking Emissions
Staking rewards shall be reduced from 250,000 DRV per week to 100,000 DRV per week.
Based on current assumptions, this represents a reduction in annualised staking rewards from approximately 3.8% to approximately 1.5%, though realised returns may vary depending on the amount of DRV staked and other programme dynamics.
3. Unstake Period
The unstake period for DRV staking shall be reduced from 28 days to 7 days.
This change is intended to reduce friction for stakers and improve flexibility while retaining a defined cooldown period.
4. Implementation
Derive Subsidiary (BVI) Ltd shall be authorised to implement any parameter updates, contract administration actions, treasury actions, frontend updates, and ancillary operational changes required to give effect to this proposal.
The changes shall take effect upon execution of the relevant onchain and offchain actions.
5. Superseding Effect
This proposal supersedes any prior DAO approved staking, buyback, or unstaking settings to the extent inconsistent with the changes set out above.