Decentralizing Ribbon Governance

Ribbon Finance
3 min readMay 25, 2021

The rise of new financial primitives in DeFi has led to the construction of complex financial strategies on-chain. For example, people can combine a Maker loan with a put option to limit their downside, or use future yield from Alchemix to open a futures position. However, the complexity of these strategies makes them inaccessible to many people.

We officially announced Ribbon on February 15, 2021 and have launched 4 products since — a Strangle Option, ETH Covered Call Vaults, WBTC Covered Call Vaults, and ETH Put Selling Vaults. These products are first-of-their-kind in DeFi — they allow people to bet on volatility or run an automated options strategy for yield in one click.

Since launching on Apr 12, the Option Vaults have grown significantly:

  • TVL has grown from $0 to a peak of $35 million despite having deposit caps
  • Over 1000 depositors across the 3 vaults
  • Over $78 million in notional options minted and sold (18000 ETH, 710 BTC, 5m USDC)

The permissionless nature of DeFi lets anyone leverage composability to combine multiple protocols into a financial product. The long term goal of Ribbon has always been to create a platform for the smartest “dorm room quants” to build these financial products that end up in the hands of millions of people. To accomplish this goal, we believe that it is best to decentralize the protocol as early as possible so that the community has a say in the stewardship of it.

Introducing $RBN

Today we are introducing the RBN token, a governance token that has a few primary use cases:

  • Steward the development of the protocol & get community feedback on important parameters such as fee models
  • Align incentives between the Ribbon stakeholders (product creators, users, team), such as liquidity mining programs or grants
  • Unite all current and future Ribbon products under a single umbrella

We will be releasing more details about the exact RBN token distribution over the next few weeks.

Token Airdrop & Early Ribbon Governance

To bootstrap Ribbon Governance, we are airdropping 3% of the RBN supply to the community today. We are airdropping these tokens to the following people:

  • Past & existing users of Ribbon products
  • Active Ribbon Discord members
  • Users of various options protocols on Ethereum (Hegic, Opyn, Charm, Primitive)

We believe that our current users and Discord community members make up the core group of people who care about Ribbon and its long term development, so we are rewarding them with majority (87%) of the total airdrop.

We have also set aside the remaining 13% of the total airdrop to Option Sellers on other protocols, namely Hegic, Opyn, Charm, and Primitive. We have seen a huge overlap between the Ribbon community and the communities of other options projects due to the nature of the Ribbon products, so we want to create an incentive for them to be involved in Ribbon governance and foster more cross-protocol collaboration.

A total of 1620 Ethereum addresses qualify for this distribution. We are excited to welcome these people to the stewardship of Ribbon henceforth.

Genesis Period

To bootstrap Ribbon Governance, we believe that the RBN token needs to have a single clear use case — to vote on governance proposals. RBN tokens are not an investment; they are a way to have a say in the future development of Ribbon. Because of this, RBN tokens will start off as being non-transferrable, and may only become transferable later on if there is strong governance turnout.

We call this the Genesis Period, and token holders will need to vote to turn on transfers once they feel that Ribbon Governance has been sufficiently bootstrapped. The Ribbon team will be creating the first proposal next week to kick things off.

Looking Forward

Starting today, you can claim your airdrop on the Ribbon app if you are eligible. We will never ask you for your address or ask you to send funds. Please beware of scams! ⚠️

Official RBN address: 0x6123B0049F904d730dB3C36a31167D9d4121fA6B

To learn more about the details of the airdrop and how distribution was decided, read this post that explores it in detail.

Over the next few weeks, we will be releasing more details about the RBN token distribution and coordinating the first governance proposals via Discord and Snapshot.

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