Proposal: Fee Distribution Parameter Vote Relaunch - Fee Split


A 2nd-gen tokenomics strategy was designed and implemented in 2022, with the final and certainly most anticipated component expected to go live in the coming weeks—USDC fee sharing.

Votes were held earlier in 2022 to decide various tokenomics parameters, but one did not pass quorum: vePERP Distribution Percentage. (snapshot page)

Therefore, we propose this vote be held again to ensure the protocol is ready when USDC fee sharing goes live.

tl;dr of what we’re voting on:

Original proposals:

DAO Treasury vs vePERP holders

Once the insurance fund hits its target, the fees will be directed to the DAO Treasury and vePERP holders. Actions of the DAO and how the treasury is utilized is up to PERP holders.

I think it is important to set a precedent of direct value accrual to vePERP holders. How the number we choose here translates to a specific APR for vePERP holders depends on a number of other factors, like the proportion of total PERP vote-locked and for what duration, fees generated, and the other parameters set in this proposal.

I suggest starting with a split of 50%/50% between the DAO/vePERP holders. As the protocol grows and matures, we’ll be able to re-evaluate with more data to fine tune this parameter. The Treasury already controls a large number of PERP tokens, so we don’t need to be overly aggressive in allocating fees to it.

DAO Treasury Explainer
The DAO Treasury refers to the funds ($PERP and potentially other tokens) held and managed by the Perpetual DAO. At present, all funds in the DAO Treasury are managed via governance vote. For more details, see the docs.


DAO Treasury / vePERP split

  1. 50% DAO / 50% vePERP holders
  2. 75% DAO / 25% vePERP holders
  3. 25% DAO / 75% vePERP holders

Updates on Dec 7th, 2022


Snapshot voting is open for 7 days:

The Final Options

  1. 50% DAO / 50% vePERP holders
  2. 75% DAO / 25% vePERP holders
  3. 25% DAO / 75% vePERP holders

We removed the proposed options that include more factors than “DAO/vePERP” parameters (e.g. timeframe, new parameters, DAO treasury usage), and we also removed the 100% vePERP option as it’s controversial being connected to v1 buyback plan.

We encourage everyone to launch new proposals to advocate your ideas that are not in the scope of this proposal.

Quorum calculation

Query timestamp:
- Wed, 07 Dec 2022 03:38:35 GMT
- UTC timestamp: 1670384315000
- Mainnet block number: 16130255
- Mainnet timestamp: 1670384315
- Mainnet UTC: Wed, 07 Dec 2022 03:38:35 GMT
- Optimism block number: 46209307
- Optimism timestamp: 1670384329
- Optimism UTC: Wed, 07 Dec 2022 03:38:49 GMT
- Circulating Supply: 85,775,503.129
- Circulating Voting Power: 105,338,064.788

Exciting! Fee sharing SoonTM :rocket:

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I agree in the direction in the team is taking towards token value accrual. Derivatives DEXs allow users to directly benefit from users trading with protocol revenue distribution. I think initially 100% of all fees from the 20% sent to the DAO/vePERP holders should all go to vePERP holders. This is a direct incentive to lock PERP as vePERP reducing the supply-side of the market.

Good to see the team thinking of token holders first and foremost.


Good to see you McKenna! Appreciate the feedback.

To clarify, you are saying the split should be 0% DAO / 100% vePERP holders? We can certainly add more options to the vote.

It would be great to hear more about the rationale behind this option.

I guess personally I can think of one, which is currently there is no clear use for DAO funds and voting to put DAO funds to use is a complex process, so accumulating USDC in the DAO somewhat dooms it to sit there undeployed, at least for the near-term :thinking:

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The previous Perp buyback plan was based on the calculation of 50% DAO. Now you are thinking of making it 0% DAO to nullify the previous vote that has already passed!? @LeeKB how can you say that there is no clear use of the DAO funds when you are fully aware that the DAO fund are currently planned to be used for the Perp buyback plan!? We’re pretty sick and tired of this gimmick. Since the buyback vote has passed a few months ago, we haven’t received a single penny of compensation. You’re thinking of various ways to cut down on the compensation amount to the v1 users despite the vote has already passed? Having a percentage less than 50% would be ridiculous.

I have an idea: If we want to give the vePERP holders more rewards, we can have a vote option to keep 50/50 split of DAO and vePERP, but then add in 50% of the DAO/treasury income will go to fund additional rewards for vePERP holders. So that the absolute amount of 17.5% DAO that goes to compensate the v1 users are not affected. This will help maintain the good reputation of PERP, so that the public won’t perceive this to be a gimmick to bypass the Perp buyback plan that has already passed.


0% wouldn’t make sense, otherwise who will pay for the operating expense of the protocol? (i.e. community building and growth)

I agree that staying 50%/50% and having funds coming out of the DAO governance to boost vePERP rewards is more appropriate, and it’s the best for all parties involved.


Let’s be straight, everyone know perp is struggling now. Look at dYdX and GMX, they’re already 10x-100x than perp. However, @Crypto_McKenna point out a great strategy to boost growth and awareness - 100% revenue to vePERP. If the community can’t take this chance I think perp is going to be irrelevant soon.

Some numbers: from Etherscan and Dune Analytics, there’s around 8m PERP in vePERP. The exchange’s 7 rolling days average volume is around $7m. Assume everything remains the same, the protocol revenue annually is $7m * 0.1% * 20% * 365 = $0.51m. It’s around 16% APR in USDC ( $0.51m / ( 8m * $0.4 ) ) for vePERP staker.

16% APR in USDC!

This is a great opportunity to get mind share during the bear market. The message is also much stronger if it’s 100% revenue to the people - instead of 75% or even 90%.

This can generate much more impact than distributing 50% ($255k a year) to the DAO. Every small vePERP holder can help instead of only a small group of DAO ( btw what does this DAO did last year? flat growth and -95% token price? ). It’s the best investment in marketing. We should let CT repeating this again and again: 100% REVENUE TO THE PEOPLE. 100% REVENUE TO THE PEOPLE.

It’s also better for the beneficiary of the perp buyback plan. According to the perp buyback plan proposal, the total amount needed for the perp buyback plan is $3.59m. As I mentioned above, the annual revenue is $0.51m, assume the DAO can get 50%, it will be $0.51m * 50% * 17.5% = $44,625 / year

It will take more than 80 years!

The key here is to boost the protocol growth. Let’s say the team spent a year, leveraging 100% vePERP narrative to improve the price which enhances the liquidity mining which attracts more volume which attracts more fees which attracts more eyeballs, then the tx volume 10x, then we vote to split 50% of the revenue to the DAO. we can save more than 70 years of waiting to finish the perp buyback plan.

The community should take every opportunity to boost the growth, and vePERP is a very important and obvious one. Everything will be a lot easier once the protocol is in a better position.

I believe 100% protocol revenue to vePERP can maximize the impact on perp’s growth. It’s the best choice for everyone in this community. 100%


Wow thanks for the comments everyone!

My apologies, I overlooked that. It is correct that voters should keep in mind previous votes.

Current fee overflow is not enough to pay operating expenses …

Appreciate your passion sir, and you do make a strong point regarding the amount of time it will take to complete the buyback proposal. But ideally we’ll have a concrete plan to make fee sharing compatible with the previous proposal for the v1 buyback… I’ll do some thinking this coming week.


Thanks for everyone’s comments and I’d like to consolidate those ideas into new options. But before that, I’d like to clarify the following.

Potential new option #1 - 100% to vePERP holders

Do you recommend having the following options for the vote?

  1. 50% DAO / 50% vePERP holders
  2. 75% DAO / 25% vePERP holders
  3. 25% DAO / 75% vePERP holders
  4. 0% DAO / 100% vePERP holders (new option)

If your main point is to incentive PERP stakers (who locked PERP), why does it have to be 100%? (instead of 90% or 95%)

The counterpoint of 100% vePERP is (so far) mostly about v1 users. Can you help me understand this: yes it might be 80 years, but if it’s 0% to DAO, wouldn’t it be infinite?

If there are more support, I’ll add this option.

Potential new option #2 - 50/50 split, then 50% of DAO income goes to vePERP holders

Interesting idea. I feel it’s a bit complicated for voters to get it right away tho. Can you help me understand if this is what you mean?

Idea: 50/50 split then 50% of DAO income goes to vePERP
As there is a 17.5% DAO income goes to v1 users, the absolute amount for v1 users is 8.75% (= 50%*17.5%)
and if 50% DAO income goes to vePERP holder, the absolute amount is 25%+50%=75%
and the remaining 32.5% (100%-50%-17.5% = 32.5%) will be kept in DAO.

Is it correct?

I’m happy to see you think about operating expenses, but for now the growth of the protocol will be the most important thing for us.

I think you support RDL’s idea, if there is more support I’ll add the option.

I would have to say that’s a really pessimistic assumption. Historically, the 28 day rolling average has been hoveing around 25M/day during the bear market and went up to near 100M/day during the good times.

We’d expect the trading volume to go back to at least that level. Instead of 80 years as you proclaimed, it will be ~10 years or much less when the Perp price goes up. And if you don’t even believe that Perp will reach back to that level, you shouldn’t even be here.

Also I don’t know what your intention is to bypass the Buyback plan that has passed. We are talking about increasing vePERP from 50% revenue to 75% or even 90% already. As if that’s still not enough for you, you wanted to push it to 100%! It’s understandable that you want to squeeze out every penny, but by doing so you will completely ignore the fact that the v1 victims will do everything imaginable against the protocol in that case. It’d be a total PR disaster for Perp, would you think that tiny percentage is really worth it?

Finally, having 0% going to DAO means the team doesn’t intend to expand or grow on the protocol, which is actually quite a bad sign for the investors, because it signals that the team is unable to translate the revenue into higher growth. A typical example will be a high-yield dividend stock that has its stock price constantly plummeting. Investors are more interested in the credibility/fundamentals of the company instead of just purely looking for dividend yield.

Yes Hana, to make it simply: it will be effectively 75/16.25/8.75 split between vePERP/DAO/v1
(16.25= 100- 75 - 8.75)

Alternatively, we can utilize all of the remaining DAO fund to boost vePERP reward. This will become 91.25/8.75 split between vePERP/v1.

I would propose to remove the current option 3 (25%DAO/75% vePERP) to be replaced by 50% DAO income goes to vePERP because both in the end achieve the same result of 75% of fee revenue going to vePERP holders.

So here’re the vote options we propose to be considered:

  1. 75% DAO / 25% vePERP holders
  2. 50% DAO / 50% vePERP holders
  3. 50% DAO / 50% vePERP holders, then allocate 50% of DAO income to vePERP. (Effectively 75% goes to vePERP holders.)
  4. 50% DAO/ 50% vePERP holders, then allocate 82.5% of DAO income to vePERP. (Effectively 91.25% goes to vePERP holders.)

I don’t see any conflict with using funds from DAO to increase yields for vePERP to boost growth. I’m in support of RDL’s idea as well. Having 0% going to DAO treasury sounds quite odd and even alarming.


Even if we do 100% to vePERP for only 3-6 months, I think it’s worth it from marketing perspective. It’s all about maximize the impact of protocol growth.

It’s a difference between live and dead.

Let’s say 50% revenue distribute to vePERP → vePERP APR -50% → less effective tokenomic → less people want to stake ( the APR will be even lower than the current vePERP APR ) → bear market token keeps crashing → liquidity mining becomes less attractive → less liquidity → less transaction volume → dead

But if we distribute 100% to the vePERP → attractive APR for vePERP → more vePERP staker → reduce supply side of the market → liquidity mining becomes more attractive → more liquidity → more transaction volume → more reward to vePERP staker → positive feedback loop

Once this growth engine is built and we successfully attract more PERP holder to lock in longer term, I think it’s fine to vote again and change the ratio to either 50% to the DAO or even more. But if it becomes the negative feedback loop at the first place, it’s a lot harder to revert the situation.

I know it looks counterintuitive but please let me know why it’s not the best for the protocol - if we can work together! This is almost like a prisoner’s dilemma. If we cooperate it’s a win-win, if we eat the marshmallow now, all of us lose. I believe this is the shortest path to make the protocol earn $3.59m and complete the perp buyback plan.


Totally agree 100% fee to vePERP holder if this option is the best way for protocol growth. If the protocol is dead, we can’t compensate the v1 user anymore, so the first priority is how to let the perpetual protocol overcome the bear market and continue to compensate the v1 user when the protocol is stable

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It may be a difference for 50% vs. 100%, but you’re nuts if you still think it will make a difference e between 91% vs. 100%.

I’m afraid the protocol will really be dead if you guys opted for 0% to make v1 victims angry again. Future investors will see how you are treating the affected users and will really be dissuaded from investing in the protocol.

Yes, let’s cooperate and go with 75% or 91% vePERP. That’s the middle ground that everyone’s happy.


Credibility is really everything. The lack of credibility is what got the whole crypto community into this crypto winter in the first place. Binance is now raising $2B industry rescue fund just to attempt to repair the reputation damage done to the crypto space.

Perpetual protocol has also been working hard with the v1 users for many months to finally reach a solution that’s good for everyone and starts to rebuild user confidence. it will be extremely unwise to squandering all that effort away.

The fee sharing increase for the vePerp holder is an opportunity to bring positive news to the space. Perp holders should not squander this opportunity by turning this into negative news of screwing over v1 victims just to gain that tiny increase of percentage from 91.25% vs.100%.


We share the same goal: to make the protocol successful and finish the perp buyback plan asap. The only difference is which path we think is shorter for the same destination.

What’s the best for perp is a higher APR for vePERP and a simpler message to make it more attractive and lead to a positive feedback loop. It can have enough impact even if we only do it for the first few months.

@RDL 's option 4 is even worse than the original proposal’s option 3 (75% vePERP). It’s not about how it distributes, but how everyone shares the message. It’s too complicated and no one can remember.

Don’t forget we can submit a new proposal to change the param anytime. I strongly suggest the community should work together, vote for @Crypto_McKenna 's new option - 100% to vePERP first and anyone can re-evaluate afterward. Once the veTokenomics take effect I believe the community will be more than happy to support distributing to the DAO, even increasing perp buyback from 17.5% to 25% is ok.

If perp can take this opportunity and grow to the level it deserves, those are all solvable and we can finish the perp buyback plan a lot faster!

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You have no idea how much we have went through to get to where we are today to find a mutual solution that finally passed the vote. It was an uphill battle lasting almost half a year with multiple back and forth and many brainstormings for ideas from both sides.I don’t know what your motivation is to continue trying to dismiss the Buyback plan that has legitimately passed the vote. You said the 4th option is not clear message, we can reword the message so the voters would understand. There’s no excuse. There’s no way the v1 victims would accept any further delay in the disbursement.(It has a locking period of is 6+months anyway.) By continuing pushing to dismiss v1 victims and trying to bypass the previous vote result, you’re seriously putting the reputation of Perp further at risk.


It does sound quite suspicious that some people here are trying to argue so hard for a mere 1% difference in APR. I would be more than happy with 10% APR at this kind of environment as long as the protocol is trustworthy.

A protocol that constantly tries to do away the previous vote result that compensates their users does not sound trustworthy at all.

A lot of people here are well connected to the leaders of the crypto world. The community is a lot smaller than you might think, and news spread fast. It’s tough to build up a reputation, but it’s so easy to lose it all.


I don’t have intention to do anything with perp buyback plan, I’m totally fine if the DAO pay v1 users by any budget other than the reward to vePERP. All I want to do is taking this rare chance to maximize the impact of vePERP because I have a decent chunk of PERP.

If we distribute 100% to vePERP for a few months and build the flywheel effect, then change the ratio to 50% or even 75% to the DAO afterward, you can get the money faster. It doesn’t even need very long-term thinking - just a few months long is enough, then you can save tens of years. It’s impossible to keep DAO 0% forever. May I know what’s wrong with my point?

If we can take this opportunity and distribute 100% revenue to vePERP first, we as a community finally has something can shill and pump the price together. perp will grow a lot better so you can get money back faster. Otherwise we may all lose


Your point is based on the assumption that winning by a governance vote is an easy endeavor for the v1 victims. As proven historically, it’s an uphill battle for us. We had been turned down so many times. At times, we thought it was impossible, but we continued to have faith and worked patiently with the team to work out a solution that finally earned support from the stakeholders.

And now you’re here sabotaging all of that effort by exaggerating the difference between 91.25% vs. 100% to be the life and death for the protocol!? You admitted that you just want to “maximize” the vePERP reward, so I completely understand your motivation now. However, I have already stated the Pros and Cons of earning that little extra is not worth the reputation damage of protocol at all.

We want to cooperate, and we’ve been doing that by dealing with the team and the community to work out solutions constantly. We have come up with new vote options that can satisfy both the vePERP holders and the v1 users. It’s you who has been constantly harping on “100% vePERP” without any willingness to meet somewhere in the middle or offer any tangible solutions. Rather, you continue to frame the v1 users’ tiny percentage in the revenue share to be the cause of the protocol total collapse:

That pretty much sums up your argument right there. The % fee shared is so small for the v1 user it will barely make any difference to the vePERP holders, and it certainly won’t result in the protocol to collapse. Perpetual protocol will never collapse as long as it has decency in its conduct and care for its users, as it has finally shown in the yes-vote of the Buyback plan. Yenwen has built a reputation in Taiwan and he’s generally well-liked. This reputation and trust allow him to continue to attract investments. Binance also raised 2B fund to help. I would suggest Perp holders to look at things from a bigger picture and take the reputation of the protocol seriously.

Back on making more constructive suggestions. Here’re our simplified vote options to make the message simple and compatible with the previous vote result:

  1. 25% vePERP / 61.875% DAO / 13.125% Buyback
  2. 50% vePERP / 41.25% DAO / 8.75% Buyback
  3. 75% vePERP / 16.25% DAO / 8.75% Buyback
  4. 91.25% vePERP / 0% DAO / 8.75% Buyback.

The Buyback plan is actually meant to benefit the perp holders as well, as Perp price will receive a regular price pump as a result. Please refer to my previous link to the “Modified Perp Buyback Proposal” for full details.