It’s been over two years since the $SAFE Token Generation Event (TGE) in 2022, and almost a year since $SAFE became transferable in 2024. While the Safe ecosystem has undoubtedly made progress, it’s time to have a serious conversation about the utility and empowerment of the $SAFE token.
One of the critical issues stems from the initial token distribution. Unlike other foundational pieces of Web3 infrastructure, the $SAFE distribution hasn’t achieved the level of decentralization needed for robust governance.
With only around 10k users having the opportunity to participate in SAFE governance, it falls significantly short of the broader distribution seen in projects like Uniswap (UNI), which distributed to over 250k addresses. This limited distribution is a primary contributor to the current challenges in SAFE governance.
Currently, the primary utility of the $SAFE token revolves around community governance. However, participation rates are concerningly low and seemingly declining. Furthermore, there are valid concerns about potential governance dominance by a small group, hindering truly decentralized decision-making.
While the Safe team is actively working on new initiatives, such as the SafeNet and Safe Agent hackathons, updates on core infrastructure development seem limited.
Ultimately, the question of how to effectively empower the $SAFE token is paramount to the future success and growth of the Safe ecosystem. A well-designed incentive mechanism could unlock significant potential and drive widespread adoption.
To kickstart this discussion, I’d like to share a few initial ideas:
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a: Revenue Sharing: Tie the $SAFE token to potential future revenue streams generated by the Safe protocol. This could include revenue from enterprise-level services, the SAFE Fee Engine, and other sources. This would provide a tangible value proposition for holding and staking $SAFE.
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b: Incentivized Governance: Multiple rewards similar to OP. Implement a system to reward users who consistently participate in SAFEDAO governance. This could involve staking rewards, voting power boosts, or other incentives designed to encourage active engagement and promote a more vibrant and representative governance process.
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c: Introduce a protocol revenue sharing mechanism through governance proposals (such as using handling fees to repurchase and destroy SAFE).
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d: Expand user scenarios: For example, use SAFE as a multi-chain gas fee payment token in safenet, or deeply bind it with the modular account abstraction standard ERC-4337.
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e: Strategic cooperation breakthrough: jointly provide on-chain fund custody solutions with compliant custodians (such as Anchorage and Copper), requiring the use of SAFE tokens as collateral or governance certificates.
These are just starting points, and I’m eager to hear your thoughts and perspectives. How can we collectively enhance the utility of $SAFE, improve governance participation, and unlock the full potential of the Safe ecosystem?