Distribute 10% of protocol revenues to EUL token holders

Euler community,

Let’s make EUL token more productive and attractive to holders. Specifically, I suggest that we distribute 10% of protocol revenues to EUL holders. Another 90% of revenues (cash flows) will be transferred to the Euler treasury to support protocol developments. Protocol revenues can be distributed to EUL holders not necessary in the form of EUL tokens, but in stablecoins or ETH.

From the technical side, staking section (UI) in the Euler app can be created to facilitate EUL staking. EUL holders will be able to deposit and withdraw EUL tokens to/from the staking pool at any time, and will receive staking rewards proportionate to the total amount of protocol revenues earned during the respective staking period.

Currently, EUL token holders do not receive financial incentives, only protocol borrowers do. I believe that EUL holders will be more incentivized to hold their EUL tokens, if they receive financial incentives, per my proposal. This change can also increase interest to EUL from outside investors that prefer productive tokens to generate income.

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I don’t think this would be attractive to holders. Protocol revenue is quite small as it is, so 10% of it could be cents on the dollar when you spread it across all EUL holders, maybe barely more for just stakers. IMO revenue shares don’t work as incentives and really only benefit whales as well. This could also potentially categorise EUL as a security, so if it did, the costs to follow regulations would absolutely outweigh any gains.

It feels a little too early for this sort of thing. If it ever makes sense, it would be much later, like maybe when the protocol is more of an incumbent relative to others. Related to the regulatory issues hinted at above, the DAO would be giving up a lot of optionality.

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