Ribbon Finance Gives Half its Protocol Revenue to Stakers
DeFi Protocol Activates RGP-13 Upgrade
By: Samuel Haig •Byte
Ribbon Finance, a decentralized protocol offering structured crypto products, is now redistributing half of protocol revenue to stakers.
On May 3, Ribbon activated the RGP-13 upgrade to provide stakers with funds generated by the protocol after the proposal received widespread support from the project’s community.
“As protocol revenue grows, users become more incentivized to lock RBN,” the team wrote. They say the cycle will create a “supply sink for RBN” that could boost the token’s value and attract further staking.
Ribbon’s revenues are derived from a 10% performance fee and 2% in management fees on positions held via its structured products. Structured products refer to pre-packaged investment strategy products based on a particular asset.
The protocol’s structured products include options-based covered calls and put selling positions tracking ETH, WBTC, SOL, and other popular DeFi assets. According to Token Terminal, Ribbon’s annual revenues are currently $7.15M.
Stakers can lock tokens for up to two years, with long-term stakers receiving boosted rewards. Data from Dune Analytics suggests that users locking their tokens for just one month will receive an APR of only 3.4%, whereas those willing to stake for two years can expect 80.5%. Stakers have locked their tokens for 1.1 years on average, with 582 users currently staking.
Ribbon currently has a total value locked of nearly $300M. Despite its TVL growing 50% since the start of March, the price of RBN has slumped 40.5% over the same period.
Ribbon Finance price and TVL. Source: Token Terminal
In late April, Ribbon revealed it is gearing up to progressively launch its v3 iteration. The revamped platform will boast up to 2x leverage, expanded assets by utilizing the Uniswap v3 oracle, and cross-composability enabling Ribbon to be used by other structured product protocols.
In March, top venture capital firm Paradigm invested $8.75M into Ribbon.