RFC-000-037: Incentives for a decentralized network

@Susruth isn’t this automatically the same annoying, as with eth that users or builders always have to look that they have enough gas to pay.?

I like items 2 and 3 of the three core components. Inflation well executed, and introducing REN as a requirement to pay for transactions and computation will add additional utility and incentive to hold REN.

I do not see the merit in creating a new foundation when there is a fledgling DAO already in operation.

I like the idea of adding inflation as a way to further incentivize darknodes and the DAO. So all inflation should be split solely between darknodes and the DAO.

I also like the idea of setting inflation at a certain rate and having a progressive reduction schedule similar to what Synthetix implemented, a weekly or monthly reduction in inflation to smooth out the effect, as opposed to annual halving cycles which would be much more jarring.

More on the Synthetix approach can be reviewed here:


Am I correct in thinking that unless we can abstract ETH GAS away from all TXs within Ren, the user might be faced with paying ETH for GAS and then REN for TX fees for ERC20 transfers/swaps?

Just wondering about the impact on UX in this regard? Thanks for the RFC :+1:

We built a relayer system, that charges Dapp specific fees converts it to Ren and pays the miners (or can burn it). So that the end user does not have to think about gas fees. It is easier to think about fees in terms of a unified asset through out the protocol, and build abstractions on top that make UX better


Interesting proposition.

However, some OG Darknode operators already voiced concern about abandoning REN as a fixed supply non-inflationary asset.

Hence my question:

Could a dual token model (comparable to NEO) work, where we introduce “RenGAS” for payments and computational needs?

This way we wouldn’t compromise our original vision while separating governance/DNOs from network usage.


The main reason for a foundation to exist, is that without a legal real world entity everyone who is contributing to or governing Ren would be legally liable to things that are not under any one person’s control. Ideally we could create a legal entity that can legally be controlled by the DAO, and all the DAO participants have limited liability similar to the equity holders of a company. The idea of the foundation would be to get as close to this ideal as possible and protect everyone involved and eventually move to an ideal solution that would hopefully be created


This is something that could definitely be put to vote, personally I like a single token model where there is just one token that all the stake holders hold and everyone is trying to add value to it. Splitting them into two would complicate things, as there could be two sets of people with different incentives and creates more conflicts than it is worth


My concerns around spinning up a foundation will be quelled as long a darknode holders have ultimate control of the funds held in the foundation through a proposal and voting mechanism

As this RFC advances all of our community could collaborate on a representative model for different stakeholders in the project to take leadership of the foundation, would love to see DNOs hold majority and also have board seats for contributors, integrators, researchers and influencers. So that a wide variety of people can collaborate to make decisions on what is good for the future of the Ren ecosystem


I would like an inflation rate based on the initial supply and not based on the new supply every year.

So 7% of 1B = 70M Token per year, fixed.

Instead of

7% of 1B 1year
7% of 1,07B 2 year and so on.

Are the inflation calculated as compunding or not?




Supply * inflationRate * N°years

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Ren is entering a period of huge changes and extreme growth. Having DNOs fully controlling the foundation would be horribly inefficient. Having to post an RFC for every decision and wait for DNOs to discuss then vote is way too slow. Things would get done at a snails pace compared to other L1s.

DNOs should simply vote for all the foundation leaders we’d trust would make the best decisions for Ren’s future. These leaders should be re-evaluated semi-regularly by DNOs on their performance and can be voted out if DNOs deem they aren’t up to standard.


I think creating a foundation with a legal structure than protects the DNOs makes a lot of sense as long as it is governed by the DAO / DNOs.

I like the inflation model, but I would also be concerned about the dilution impact it could also have. Some of the comments I like in this regard are: 1) continuing to cap the max DNOs at 10,000; 2) always base the inflation on the 1B current tokens; 3) include a burning process based on activity. My suggestion regarding points 2 & 3 would be to link these together. For example, if, based on how the burning mechanism is set up, we expect to burn X% of REN each year (or week or month, annualized) then the inflation rate is set to 2X%. I think this would allow the ecosystem to provide the right incentives and help keep the REN value from decreasing due to inflation.

I like using REN for transaction fees and not creating a new Gas token. My question in this regard is how the transaction fees would be distributed? Would they just be allocated to DNOs or are we also implement a staking mechanism for people that don’t have enough for a DNO? Not sure staking is even feasible outside a DNO, but perhaps we could use a validation type model where DNOs could pledge more than 100k with the excess over 100k getting a share of the rewards too and then allocated to the stakers after a percentage going to the DNO. If we can do this it would have the added benefits of locking up more of the supply, decreasing circulating supply, and giving DNOs some additional revenue while they are funding the foundation.

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Yep, the current idea is to do inflation based on the initial supply and not do any kind of compounding

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I think it would be super cool, if (majority of the) proposals that ask for funds from the Foundation will also explain how they would use them and how they can repay the funds they recieved in the form of deflation.

For ex, a project that asks for let’s say 80M REN, comes with a clear plan on how it would eventually burn atleast let’s say 160M REN in the next 10 years, and will continue deflating the asset as the time goes. And the funding is given based on quantifiable metrics over let’s say 4 years. If the project or the team is not performing the foundation will stop funding the project.

I know that this is not possible for all proposals as there would be some that are just public goods like, SDKs etc which need to be funded. But all the major proposals can come with a deflationary proposal, which would accelerate the accrual of value for all Ren holders

The foundation could also decide to burn Ren that it cannot deploy into ventures (that give back more Ren they take) or public goods.

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Remove the need of having Ren in the wallet to pay any gas is the way to go.


I am all for inflation as long as it is a considered mechanism with reduction of inflation over time possibly even introducing a burn mechanism in the future if needed.

The scope of what was initially set out with Ren has completely changed and grown in to something much greater. To be able to compete in the layer 1 space for developers is going to be very difficult without being able to fund them to build properly and we have seen how big these dev communities can grow with the right funding and inflation mechanisms to bootstrap the ecosystem. Great proposal its time for us to move to the next phase where we can build something much bigger than we ever could have imagined.


Blockquote I think it would be super cool, if (majority of the) proposals that ask for funds from the Foundation will also explain how they would use them and how they can repay the funds they recieved in the form of deflation. For ex, a project that asks for let’s say 80M REN, comes with a clear plan on how it would eventually burn atleast let’s say 160M REN in the next 10 years, and will continue deflating the asset as the time goes. And the funding is given based on quantifiable metrics over let’s say 4 years. If the project or the team is not performing the foundation will stop funding the project.

I wonder whether this would just be making more complexity than is needed. We need it to be as frictionless as possible for devs to just be able to do what they do best, build an application that is going to generate revenue and bring more users of the Ren platform. We can always introduce a burn mechanism at a later date?

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my take would be go ahead with the inflation as normal. i think requiring burns in terms of tokens would require the companies to start hedging and buying futures makes it too complicated. however with the inflation now i would implement a hope that deflation can someday surpase the inflation, like afaik eth does now, by adding a simple 1% of all tx fees get burned, or even lower, whatever is fine. i see ren usage going up dramatically with 1. the new tech (h2h), and 2. hopefully someday lower fees inviting bot usage, so dno will have logical expectation/hope that in some time the rates flip, and even it deflates below 1b


So the idea is not to force people to burn Ren, it is to incentivise projects like RenEVM which would deflate eventually but would need resources to be built. There is a clear pathway to deflation there, by introducing 50-75% of the tx fees to be burnt and cause deflation.

Again this does not have to be a pre-requisite for funding, just something that would get more people excited to build core protocol level tech that actively deflates Ren.


Interesting approach, I definitely like the immediate step towards decentralization and look forward to see the details around security assumptions (especially around growing TVL).

As to the proposed approach in this RFC I’m curious around a few things, will give suggestion to 2 scenarios:

  1. What about the gastoken being renDAI /renUSDC/renUSDT? I cant think of any protocol having a fixed fee like that which would be quite unique in crypto. Would be amazing for UX as devs/users would always have something stable to work around. DNOs will be happy to receive stables as well I would imagine.

In regards to the RenFoundation/RenDAO I would suggest a one time supply injection (eg. 500m REN) which goes directly to the treasury and has certain limitations as to how much that can be spent per month/quarter/year.

To counter this sudden supply boost any actions taken on the subnet (where gastoken is paid in stables) Ren automatically takes a certain % of that gas (or all of it) and buys up REN and burns it (similar to BNB). This is done until supply is back to 1B and burn mechanism is no longer needed. After that all stable fees go to nodes.

  1. In this scenario I will go with what was suggested in the RFC regarding the three components and using REN as gastoken. I am personally in favour of this change as I think the tokenomics of Ren needs a boost for long term sustainability.

The foundation; should be elected by DNOs and anywhere between 50-80% of the decided inflation rate goes to the foundation. The current 7% tax on darknodes can be removed in this case imo. I am also not against a sudden supply injection directly to the foundation (eg 100-500m REN) with vesting schedule.

Inflation; I would suggest remaining 20-50% emission to go to stakers. Running a node will automatically count as staking so DNO will receive their share but on top of that anyone with less than 100k REN can stake and partake in those rewards as well, this way the small holders will also be incentivized. For staking they can participate in governance (where voting power increases with time) and receive rewards from the emission.

The token utility; should imo burn all REN that is used as gas and if it becomes deflationary too fast the protocol can automatically increase the inflation (in case usage booms and too much is burned). This way there is no concerns about anyone dumping the REN in the market and usage of the protocol is directly correlated with the success of REN token.

(I also like Susruths suggestion around proposals for funding presenting a plan as to how their usage will burn X amount of REN to counter the inflationary emission. That is imo another argument to introducing a sudden supply injection of 100-500m REN immediatly into RenDAO/Foundation treasury)


Will the proposal, if approved, change anything about h2h and ren 1.0 and the token function?
Or will everything stay the same and only ren 2.0 will use ren as a gas token?