Ronin's First Governance Vote RGP-1 Seeks to Invest Treasury Funds into Katana Pools
Written with artificial intelligence.
The Ronin network has launched its first governance proposal, RGP-1, which asks RON holders to approve allocating part of the treasury into liquidity pools on Katana. If successful, approximately 17% of the treasury will be invested to enhance market liquidity and generate additional trading fees.
Overview of RGP-1
RGP-1, the inaugural governance proposal from the Ronin network, is now open for voting among RON holders. The proposal seeks to allocate a portion of the Ronin Treasury into liquidity pools on Katana, specifically pairing treasury assets WETH and USDC with RON. This initiative aims to deepen the markets for RON and increase trading fees flowing back to the treasury.
Treasury Involvement
The Ronin Treasury, currently valued at about $1.1 million, will deploy approximately $92,000 from its holdings in WETH and USDC if the proposal passes. The intended deposits include:
- 21.97 WETH into the Katana V2 RON/WETH pool
- 39,469.2 USDC into the Katana V2 RON/USDC pool
The treasury will match these deposits with around 1.62 million RON, contributing to an estimated total liquidity of $185,000 for the RON markets.
Financial Implications
Each trade conducted through these pools will incur a 0.3% fee, with the treasury already collecting a 0.05% fee on all trades. Under RGP-1, the treasury would also earn a 0.25% share from its own liquidity positions. Based on recent trading volumes, this could yield approximately $14,100 annually, although actual earnings may vary between $6,100 and $16,000 per year.
The proposal includes backtested results which show that, in a three-month scenario, the positions would have generated $2,700 in fees while experiencing $500 in impermanent loss. Over six months, a decline in RON value resulted in a loss of $1,800 compared to simply holding the tokens. Nevertheless, the proposal suggests that fee income remains profitable in stable or recovering market conditions.
Voting Process
Voting on RGP-1 involves several phases: 1. Forum Discussion: Initial discussions in the public forum. 2. RON Holder Confirmation: Requires 30 upvotes from RON holders. 3. Portal Publishing: Proposal goes live for voting. 4. Voting Snapshot: RON balances are captured for voting. 5. RON-Weighted Vote: A 7-day voting period. 6. Execution: Successful proposals will see deposits executed within 14 days.
A 66% majority is required for approval, with a quorum of 20 million RON for the vote to be valid. If the proposal is rejected, the treasury will retain its current assets, and a revised proposal can be submitted after a 30-day period.
Conclusion
RGP-1 represents a significant step in Ronin's governance, providing RON holders with a direct say in treasury management. If approved, it could enhance liquidity and generate revenue for the treasury, setting a precedent for future proposals from other projects on the Ronin chain.