RBN Airdrop Distribution

Ribbon Finance
4 min readMay 25, 2021

To bootstrap Ribbon Governance, 3% of the RBN token supply (30M RBN) will be distributed to the community. This blog post explores in detail how the airdrop distributions were decided and calculated.

Official RBN address: 0x6123B0049F904d730dB3C36a31167D9d4121fA6B

Starting today, you can claim the airdrop here. We will never ask you for your address or ask you to send funds. Please beware of scams! ⚠️

External Option Protocols

A total of 4M RBN was distributed between users of existing options protocols on Ethereum: Hegic, Opyn, Charm, and Primitive. The 4M RBN was split equally between:

  • Current Hegic LPs (ETH & WBTC pools)
  • Opyn option sellers of options that expire some time in 2021
  • Charm option sellers of options that expire some time in 2021
  • Primitive LPs

Because Ribbon’s current products are primarily focused on yield generation through option selling, this airdrop was aimed towards option sellers on the other protocols who are already comfortable with the risks. We believe that option sellers are more options-literate in general, and will be able to contribute more to the development of Ribbon.

Each address is eligible for 5,772 RBN.

Ribbon Strangle Buyers

A total of 500K RBN was distributed between users of Ribbon’s first product, the Option Strangles. Although Ribbon has currently put that product on pause due to gas constraints, we want to reward the early users.

Each address is eligible for 11,904 RBN.

Ribbon Theta Vault Users

A total of 10.5M RBN was distributed equally between users of Ribbon’s flagship product, the Option Vaults. Any user who has deposited at least $100 worth of assets into either of the 3 vaults (ETH Covered Calls, WBTC Covered Calls, ETH Puts) before 22nd May 2021 (12am UTC) is eligible for their share of RBN.

Each address is eligible for 12,195 RBN.

Ribbon Theta Vault Bonus

An additional 10M RBN was distributed pro-rata between users of Ribbon’s Option Vaults, based on the amount of assets they deposited into the vaults. These are extra rewards that are given to depositors who have contributed the most to the protocol’s growth so far, and are still in the vaults as of 22nd May 2021 (12am UTC).

Box Cox Transformation

Instead of using a linear function to distribute the bonus, we instead apply a Box-Cox transformation, with a lambda = 0.5. This transformation helps to make the rewards more equitable, so that a small number of whales do not end up getting the lion’s share of the bonus.

As you can see from the chart, applying the transformation leads to the largest holder’s rewards decreasing from ~350k RBN to ~200k RBN. This effectively gets distributed between the smaller depositors.

The median bonus is 6,609 RBN.

Ribbon Discord Community Members

A total of 5M RBN was distributed between members of the Ribbon Discord who have sent >5 messages. These are people who have contributed to Ribbon through proposing new ideas, giving feedback on the products, fielding questions from other users, and making memes. We believe that many of these members will end up becoming the most active Ribbon governance members, and should be rewarded as such.

While we set aside 5M RBN for the Discord members, we wanted a way to further reward the most passionate community members instead of the “wen token” members. We distributed a form to the active members and let them decide if they wanted a small airdrop or a Ribbon Hat (a running meme in the community). The people who picked “small airdrop” would get a fixed amount of RBN, and the people who picked “Ribbon Hat” would receive the rest.

Over 60% of members picked Ribbon Hat!

Out of 104 participants, 64 members chose Ribbon Hat and will receive 62,500 RBN each, while the remaining 40 members will receive 27,027 RBN each. This proved to be an extremely effective mechanism to filter for the most passionate community members and reward them even more, as they will likely become responsible stewards of the Ribbon project.

Concluding Thoughts

We spent a lot of time thinking about the most effective way of distributing RBN to our community. We wanted to strike the perfect balance between rewarding Ribbon users, Ribbon Discord members, and incentivizing new people to join the community — we are confident that this distribution accomplishes that.

During the Genesis Period, RBN will remain non-transferrable and can only be used for voting. We hope to see the early RBN holders be actively involved in the decisions and roadmap of the protocol.

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