[SEP #21] SAFE Token Utility

Proposals Phase 2: Voting
1

This proposal was previously posted in Phase 0 discussion: [Discussion] SAFE Token Utility

Title: [SEP #21] SAFE Token Utility

Authors: Lukas Schor (Safe, @Lukas) , Steven Biekens (Safe, @Steven)

Created: 2024-02-13

Abstract

This proposal outlines strategies to enhance the utility of the SAFE token (“SAFE token” or “SAFE”), inspired by ideas from the Safe community. The ratification of this SEP completes milestone E as specified under SEP #3 (“Towards clarity on milestones before voting on enabling transferability again”). It also plans for future token utility expansions, emphasizing community involvement in the further development of the SAFE token utility.

Proposal types

State which proposal type this proposal belongs to.

SEP: Constitutional Proposals

SEP: Governance Proposals

Other SEPs

Proposal details

This proposal outlines suggestions to expand the utility of the SAFE token. The token utility ideas that were collected from the Safe community served as a key input for this proposal.

Token Utility Design Space

This section examines the primary goals and guiding principles that shape the utility of the SAFE token, ensuring strategic alignment with the Safe ecosystem’s overarching objectives.

SafeDAO Constitution / OBRA

Safe enables users to own their digital assets in a secure, convenient and interactive way, which will require smart accounts (also known as smart contract wallets) to become the default in web3. This is also reflected in the mission outlined in the SafeDAO Constitution:

“SafeDAO’s mission is to establish smart contract wallets as the default means for interacting with web3 […] As SafeDAO, we aspire to work towards this mission by establishing standards for composable smart contract wallets (the “Safe Protocol”).” (SafeDAO Constitution, “2. Mission”)

The SafeDAO Constitution further bases this mission on three strategic pillars / goals that impact the SAFE token utility:

  • Foster a vibrant ecosystem: The SAFE token should benefit from a vibrant ecosystem, rather than a single product. Additionally, principle 2 of the SafeDAO Constitution states that any utility of SAFE should directly or indirectly add value to the Safe ecosystem. Furthermore, changes to token mechanisms need to consider the effects on different stakeholders including users, developers and token holders.
  • Resilience through decentralization: The SAFE token can be used to achieve technical / economical / governance decentralization for critical components in the Safe ecosystem.
  • Tokenize value: Mechanisms should be created to link the growth of the Safe ecosystem to the growth in utility of SAFE.

OBRA: The resource allocation framework OBRA derives strategies and initiatives from the above goals and establishes processes for resource allocation. While not impacting the token utility design space directly, OBRA needs to be considered for funding future explorations and implementations of token utility.

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Strategic focus

The Safe Smart Account has become a trusted infrastructure in the web3 ecosystem, currently securing over $100bn in assets. Given the broad potential applications for the SAFE token, this section suggests a strategic direction and guidelines for developing and integrating token utilities, aligned with SafeDAO’s mission. This strategic focus serves as guidelines for future explorations and implementations of token utilities and the respective growth of the Safe ecosystem.

Any explorations of token utility should be merely seen as preliminary conceptual ideas, which are likely to be subject to substantial change, as token utilities could also be explored beyond the ones mentioned in this SEP as long as they fall into the SAFE token utility design space defined below. There is NO guarantee and NO warranty that any of the mentioned utilities are being explored and/or being implemented in the future.

At the core of this strategy is Account Abstraction, the foundation enabling smart contract-based accounts. For smart accounts to become a mainstream option, they must offer clear, tangible advantages to both developers and users. These benefits will be facilitated by the Safe Core Protocol, encompassing different ‘abstraction layers’. These abstraction layers can be implemented separately but will eventually be strongly interconnected.

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1. Account Abstraction (“Smart Accounts”)

Account abstraction is the basis for enabling smart accounts to interact with web3 applications. Initiatives such as ERC-4337 empower and standardize smart accounts, enabling new use-cases such as passkey-controlled accounts, recovery schemes, or seedless onboarding. However, account abstraction itself is only a first step towards achieving mainstream adoption of smart accounts. Additional challenges have to be solved to fully unlock the potential of advanced security, payment and network properties of smart accounts.

2. Network Abstraction (“Smart Link”)

The Network Abstraction Layer aims to simplify the fragmented blockchain network landscape, enabling a seamless experience across different chains. This layer introduces a framework that significantly enhances cross-chain functionality, fostering a more interconnected ecosystem. An example of this abstraction layer is the ability of a Safe Smart Account to control assets on multiple chains and make cross-chain interactions (see also the discussion on the community forum).

3. Username Abstraction (“Smart Domains”)

Username Abstraction offers an intuitive way to navigate the blockchain’s complexity by replacing cryptic blockchain addresses with human-readable names, combining existing solutions like ENS (SafeDAO holds safe.eth) with smart contract wallets (e.g. leveraging solutions like Nameverse or similar). The SAFE token could potentially be used to e.g. claim usernames on a designated namespace. This abstraction layer not only enhances user experience but also paves the way for new economic models based on domain registrations or renewals (Some discussions were held on the community forum on this topic, including this thread).

4. Payment Abstraction (“Fee Engine”)
Traditional payment functionalities, such as recurring payments and subscription models, are still underutilized in the web3 space. The objective of payment abstraction is to bridge the gap between conventional payment systems and the evolving web3 payment infrastructure and enable economic sustainability for the Safe ecosystem. An initial proposal for payment abstraction is the Fee Engine. The SAFE token could potentially play a role around the concept of a payment splitter (suggested by @varunkcs). Additionally, the proposal also outlines the concept of an Ecosystem Contribution, which allows to support community-driven initiatives within the Safe ecosystem via SAFE token governance.

5. Security Abstraction (“Registry”)
Smart accounts enable opportunities to create new onchain security primitives that protect users. One example is the introduction of registries (e.g. by leveraging Rhinestone, ZenGuard or similar solutions) as a way to establish stronger security properties and enforce standards for smart account modules. An initial architecture can be found on GitHub. On the SAFE token’s role, several ideas were put forward by the community (@CryptoEconLab, @varunkcs and @Abraxas, @LongHash_Ventures and @LuukDAO). Examples include mechanisms around the curation on a module registry, or a “security module” that acts as a protocol-native insurance.

Future Abstraction Layers
There may be additional abstraction layers that become relevant for the Safe Core Protocol. This may include privacy abstraction, such as adopting a UTXO model or stealth addresses (as suggested here), or compliance abstraction that enables privacy without sacrificing on compliance. Generally, the Safe Core Protocol aims to enshrine components where the value of standardization is higher than the value of heterogeneity.

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Out of scope

The SAFE token utility should intentionally not be part of the Safe Smart Account itself. Having the SAFE token be a requirement for developers using the Safe Smart Account may hinder its adoption or even lead to forks. This can negatively impact the ecosystem consistency as well as inclination of certain developers to adopt Safe Smart Accounts in their solutions. Having a commitment from the SafeDAO to keep the base smart account functionality independent from the SAFE token allows for a more aligned ecosystem to be built around the Safe Smart Account. This allows the ecosystem as a whole to become more valuable, which will ultimately benefit other layers of the stack such as the Safe Core Protocol.

Existing & Proposed Token Utility

This section lays out a proposal, to be ratified by the SafeDAO, on the SAFE token utility as well as potential opportunities for future explorations of additional utilities.

a. Existing Utility: Governance

SafeDAO is governed using the SAFE token (see SafeDAO Constitution). Governance should remain a key utility of the SAFE token, which was also indicated by the community (see for example token utility proposals from @varunkcs @LuukDAO around the votings on the allocation of resources, including grants).

SAFE token holders can vote within the scope of governance of SafeDAO. They can vote with their vested and unvested tokens and delegate their voting power.

The following domains are part of the governance of SafeDAO (for more details on the scope of governance see Section C of the Governance Framework):

  • Constitution (see SEP #4)

  • Governance framework: This encompasses the scope of governance, dynamic governance, decision-making process and principles of proposal implementation (see SEP #7)

  • Resource allocation framework (see SEP #8)

  • Assets held for SafeDAO (see “Treasury” in the Governance Hub)

    • SafeDAO Treasury and joint SafeDAO/GnosisDAO Treasury
    • Certain IP rights: ENS domain, NFTs etc.

  • Safe Grants Program with funding and administrative support provided by SEF (see SEP #6)

  • SEF governance signaling: Suggestion (“social signaling”) regarding the establishment and composition of DAO committees, once established by the Foundation

  • Unpausing of SAFE token transferability (see SEP #2)

  • Safe{Core} Protocol: Parameters and other governance-related aspects, once they have been transferred to the governance of SafeDAO

b. Proposed Utility / Use Case: Safe Activity Program

This proposal introduces the Safe Activity Program, which incentivizes Safe users to actively participate and contribute to the Safe ecosystem (both onchain and offchain activity that is deemed valuable could potentially be considered, but also depends on factors such as technical feasibility). By actively using the Safe Smart Account, users participating in the Safe Activity Program display dedication to the long-term success of Safe. In return, these users become eligible for discretionary activity rewards, such as additional functionality, discounts, or other benefits. The Safe Activity Program would be designed to benefit and involve the entire Safe ecosystem.

The exact scope of the activity rewards will have to be worked out. But rewards could consist of for example:

  • Sponsored transactions: Ability to send a limited amount of free transactions
  • Season NFTs: Ability to claim (Safe-bound) NFT for each governance season, enabling additional perks such as guaranteed access to key events such as Safe{Con}
  • SAFE tokens: SAFE tokens would be distributed to participating users that are active with their Safe Smart Account

The SAFE token gets an additional activity related use-case as part of the proposed Safe Activity Program. Locking SAFE can boost/multiply the rewards the participants receive from their activity in the Safe ecosystem.

Any SAFE tokens that eligible users would be able to claim will be funded from the remaining user allocation. This discretional Safe Activity Program would run over a limited time of up to 6 months, afterwards it will be revisited for potential extension by the Safe Ecosystem Foundation. This allocation serves a two-fold purpose:

1. Expand the number of token holders: The Safe Activity Program increases the token allocation of each participating user. By providing additional utility, the Safe Activity Program should attract more stakeholders who do not currently hold a SAFE token and are active Safe users.
2. Strengthen the user allocation for active users: Offering Safe Activity Program rewards benefits all active Safe users. This gives each user the opportunity to individually influence their allocation relative to others through activity.

The initial Safe Activity Program rewards already provide various benefits for active token holders participating in the Safe Activity Program. The program should also help bootstrapping the adoption of the SAFE token. However, it is designed as a composable mechanism that can be adapted or expanded over time through future community initiatives, such as expanding the program to networks beyond Ethereum L1.

c. Community Involvement

This SEP should be seen as a first step / foundation for ratifying and exploring the token utility of SAFE. As the Safe{Core} Protocol evolves over time, the design space of utilities for the SAFE token will naturally expand.

Initial Feedback

Below summarizes some early themes identified from community feedback on the proposal, as posted on the SafeDAO forum and discussed during a community call. They narrow down the strategic focus into more concrete ways how the SAFE token can obtain additional utilities. A thorough analysis is required to take into account legal, regulatory, technical and feasibility considerations before any implementation. Any explorations of token utility should be merely seen as preliminary conceptual ideas, which are likely to be subject to substantial change, as token utilities could also be explored beyond the ones mentioned in this SEP as long as they fall into the SAFE token utility design space defined above. There is NO guarantee and NO warranty that any of the mentioned utilities are being explored and/or being implemented in the future.

Canonical DeFi features / modules
An area to explore is use cases that link DeFi modules to SafeDAO. Currently there are over $100bn in assets stored on Safes, and DeFi modules could enable asset owners to use their assets more productively. Potential examples include canonical swap, stake, bridge, stablecoin or flashloan modules. Through those modules, the abundant liquidity could be tapped into by others, and an Ecosystem Contribution similar to the one proposed in the Fee Engine link back to SafeDAO.

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SAFE Staking
This idea suggests that the proposed activity program for the Safe ecosystem, which involves locking SAFE tokens, could potentially evolve into a form of staking. As the abstraction layers are being built out, different components will have the need for economic security to be provided through staking mechanisms. This could allow SAFE token holders to engage in various staking opportunities as they develop within the ecosystem. A framework could be developed which, similar to restaking, enables SAFE holders to choose among different staking mechanisms, possibly even simultaneously participating in different security models. The different available staking mechanisms could be governed by SafeDAO via an onchain registry, ensuring that they are aligned with SafeDAO’s interest and security standards.

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Fee engine
Several community members highlighted the “fee engine” as an initial concept that should be prioritized and iterated on. In this respect, it is important to determine which products and services the market is willing to pay for. Another aspect is to balance fees (determine what should remain free/affordable and what a fair market rate could be).

Ongoing Community Involvement

The community is encouraged to be part of the exploration and implementation of future SAFE token utilities. More concretely, SafeDAO will be involved in the following parts of the process:

  • Exploration: SafeDAO is invited to provide feedback on token utility ideas as well as put forward new ideas.
  • Funding: SafeDAO can decide on the funding of initiatives around the research and implementation of token utility ideas (via the Outcomes-based Resource Allocation “OBRA”). Currently, the OBRA strategy “Research and implement SAFE token utility” can also financially support certain explorations as long as they fall into the requirements outlined in the token utility design space section.
  • Ratification: SafeDAO can vote on the implementation of token utilities and signal the direction of future explorations.

Purpose and Background

In November 2022, SafeDAO decided against making SAFE transferable. As a result, the Safe community laid out milestones that should be completed before voting on transferability again in SEP #3 (“Towards clarity on milestones before voting on enabling transferability again”). These milestones are:

  • Milestone A: The claim period has passed (Reached on 27.12.2022)
  • Milestone B: An SEP on a constitution has been ratified (Reached as part of SEP #4 on Feb 23, 2023)
  • Milestone C: An SEP on a governance framework has been ratified (Reached as part of SEP #7 on Oct 20, 2023)
  • Milestone D: An SEP on a resource allocation framework has been ratified (Reached as part of SEP #8 on Nov 27, 2023)
  • Milestone E: An SEP on token utility has been ratified (Pending)

The ratification of this SEP marks the completion of the final milestone (Milestone E). Important, this proposal itself is not a vote to enable the transferability of the SAFE token!

Effects and Impact Analysis

The SafeDAO Constitution requires that any changes to token mechanisms “need to consider the effects on different stakeholder including user, builder and token holder.” (SafeDAO Constitution, Principle 2).

User

  • The discretional Safe Activity Program provides active Safe users with additional perks, such as sponsored transactions.

Builder

  • The discretional Safe Activity Program could have a significant positive impact on the adoption of Safe Smart Accounts and support existing and new builders leveraging Safe.
    Apart from that, this SEP also paves the way for future enhancements in SAFE token utility. These potential enhancements encompass areas like payment-, security-, and network abstraction. These advancements hold promise for builders, offering them opportunities to refine the developer experience and foster economic sustainability.

Token holder

  • The ratification of this proposal marks the completion of Milestone E as specified under SEP #3. As this is the final milestone. As such, it is possible for the community to propose a vote on enabling the transferability of the SAFE token in case this SEP passes.
  • This proposal sets a strategic focus for the SAFE token utility meaning there is an impact on other aspects of SafeDAO governance, such as OBRA, given that the strategic focus should set guidelines for what types of initiatives are funded under a strategy like the proposed “Research and implement token utilities” strategy.

Note that a ratification DOES NOT guarantee an implementation. The token utility explorations should be merely seen as preliminary conceptual ideas, which are likely to be subject to substantial change. Before any implementation, extensive analysis is required to get a clear picture on aspects such as legal/regulatory risks, technical feasibility, resource availability, product roadmap etc. Nevertheless, the commitment is to act in the best interest of SafeDAO and make every effort to bring to fruition the ideas and desires expressed by it.

Any explorations should be merely seen as preliminary conceptual ideas, which are likely to be subject to substantial change, as token utilities could also be explored beyond the ones mentioned in this SEP as long as they fall into the SAFE token utility design space defined above. There is NO guarantee and NO warranty that any of the mentioned utilities are being explored and/or being implemented in the future.

Alternative Solutions

As specified above, the design space for SAFE token utilities is vast. However, aspects such as legal/regulatory risks, technical feasibility and the product roadmap need to be taken into consideration when prioritizing token utilities. As such, the proposal is to be viewed as a sensible starting point, deliberately leaving many future pathways open.

Alternatively, the token utility ratification could also be more descriptive and define a single pathway for the SAFE token utility to be further built out. However, given the various different possibilities and lack of validation / experimentation, it seems too early to limit the design space too much. Future token utility ratifications could further limit the strategic focus based on additional community input and insights from experiments.

Implementation

Own implementation possible

Own implementation but with funding (how much % to implementation)

Request for technical support through Safe matter experts:

  • Who is needed?

  • Did you reach out?

  • Is there a roadmap?

The implementation of the Safe Activity Program requires development and coordination work. This process would be carried out by the Safe Ecosystem Foundation. The team will follow a rigorous process, including auditing any smart contract code that is used in production.

Open Questions

The community is invited to provide feedback on the overall proposal. The questions below could help to provide some guidance.

  • Strategic focus
    • From the abstraction layers that are mentioned, are there some that should be prioritized? Some that are not seen as important?
    • Are there other “abstraction layers” that are not mentioned but important to consider as potential avenues for the Safe{Core} Protocol?
    • How does OBRA play into the SAFE token utility exploration and implementation? What initiatives would be funded based on this?
  • Safe Activity Program
    • Any types of rewards that are worth considering for the program?
    • Any ideas on mechanisms to distribute the rewards?
    • Suggestions on how the ecosystem could be involved

Copyright

Copyright and related rights waived via CC0.

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Please join us for the third community call to continue the discussion on the SAFE token utility proposal:

:alarm_clock: Thursday, February 29th - 16:00-17:00 UTC

The call will be hosted in our Discord. Sign up here .

Feel free to bring your feedback and questions. Looking forward to seeing you there!

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I’ve thought more about the Activity Program and how it can be a testing ground for Safe token utility.

In my POV, activities that relate to OBRA (as the primary builder coordination mechanism), have a high potential to generate revenue, or directly contribute to Safe Token health should be prioritized.

Below is a list of initial activities I propose to incentivize:

OBRA:
Propose to allocate 20% of the program to reward OBRA s1/s2 participants.

  • User voted on OBRA proposals or delegated to someone who did: Fixed Reward based on a minimum voting power / delegate amount of, for example, 1,000 SAFE tokens.
  • OBRA projects who received their entire funding Stream, as this showcases they accomplished their milestones, and they should be rewarded in tranches based on the size of their proposal: e.g., Under 10k = 2,500 SAFE, Under 25k = 5,000 SAFE, under 50k = 7,500 SAFE, under 100k = 10,000 SAFE.

High Revenue Potential
Propose to utilize 40% of the program to reward High Revenue Potential activities.

  • Holding selected yield-bearing assets, starting with sDAI, stETH, rETH, rsETH, ETHx, stUSDT, sfrxETH, and stEUR in a Safe would receive a proportional share of SAFE for this category. I see a lot of potential in taking a (small) custody fee on yield-bearing assets. On average, these assets earn 3-4% APY. We could charge a custody fee of 0.1% a year for the additional access and security users get from Safe, leaving them with over 95% of their returns. At 91B stored in Safe, charging a 0.1% custody fee would generate up to $91M. Assuming we don’t charge accounts under an x amount and potentially only charge certain assets (such as YBA or LP tokens), we would still be able to earn at least 10M a year.

I think the allocation for YBA in Safe should be significant, as it would incentivize current Safe holders to transform their idle assets into YBA and hopefully attract new, large holders to Safe, providing them with the security and utility of our platform.

Safe Token Health
Propose to utilize 40% of the program to reward increased liquidity and locking.

  • I see value in having stakeholders lock their Safe to signal long-term alignment; however, I believe locking an LP token (as opposed to just SAFE) is more beneficial to Safe. While deploying a full-fletched veSystem out of the gates might be too much effort, I can see a simple system comparable to what Aura does (tokens are locked for a fixed 16 weeks and earn some rewards during the time they are staked) to be valuable. I would propose starting with a 20% ETH (or staked equivalent) and 80% SAFE pool on Balancer - as this pool could be converted into the ve or staking token comparable to AAVE’s Stake ABPT or Balancer’s veBAL. \

In the longer-run, I think our Ecosystem Accounts initiative (supported by OBRA and initially starting with a pilot for Optimism) could play a role in streamlining additional Safe Activity Programs!

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Many thanks to @Steven and @lukas for putting this proposal forward. The potential design space for Safe token utility is vast, and this is a solid platform to build upon. We’re really excited by the plan for abstraction beyond accounts, but to networks, security, usernames, and payments as well.

On token utility, we generally view it in 3 segments:

  • Value capture
  • Value distribution
  • Value protection

We’re aligned with the community that:

  1. Value can be captured with the Safe Fee Engine (though in this case, we feel “value creation” is the right term)
  2. Value can be distributed with the Safe Activity Program
  3. Value can be protected with token sinks & staking mechanisms

How value can be captured & created with the Safe Fee Engine is clear at this stage. Understand that the mechanisms to distribute and protect Safe token value are yet to be extensively defined as they are subject to further DD, but we’d like to propose a few potential areas to explore and revisit in the future.

In this doc, you’ll find a table outlining the key stakeholders to incentivise to drive adoption of Safe smart accounts, how tokens can be distributed to them, and what token sinks can be implemented: Potential Safe Token Value Distribution - Google Docs

The document is open for comments, looking forward to your thoughts & further ideas @Steven @lukas @corbinpage @LuukDAO @pet3rpan-1kx @AccelXR-1kx @Andre @lakejynch @felix_greenfield @adamhurwitz.eth et. al

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The proposal was just updated to incorporate feedback from the community (ideas that were proposed in the current thread, this thread (proposal in phase 0), and during the prior community call). Concretely the following text was added under “c. Community Involvement“ that is part of the section “Existing & Proposed Token Utility”:

Initial Feedback

Below summarizes some early themes identified from community feedback on the proposal, as posted on the SafeDAO forum and discussed during a community call. They narrow down the strategic focus into more concrete ways how the SAFE token can obtain additional utilities. A thorough analysis is required to take into account legal, regulatory, technical and feasibility considerations before any implementation. Any explorations of token utility should be merely seen as preliminary conceptual ideas, which are likely to be subject to substantial change, as token utilities could also be explored beyond the ones mentioned in this SEP as long as they fall into the SAFE token utility design space defined above. There is NO guarantee and NO warranty that any of the mentioned utilities are being explored and/or being implemented in the future.

Canonical DeFi features / modules
An area to explore is use cases that link DeFi modules to SafeDAO. Currently there are over $100bn in assets stored on Safes, and DeFi modules could enable asset owners to use their assets more productively. Potential examples include canonical swap, stake, bridge, stablecoin or flashloan modules. Through those modules, the abundant liquidity could be tapped into by others, and an Ecosystem Contribution similar to the one proposed in the Fee Engine link back to SafeDAO.

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SAFE Staking
This idea suggests that the proposed activity program for the Safe ecosystem, which involves locking SAFE tokens, could potentially evolve into a form of staking. As the abstraction layers are being built out, different components will have the need for economic security to be provided through staking mechanisms. This could allow SAFE token holders to engage in various staking opportunities as they develop within the ecosystem. A framework could be developed which, similar to restaking, enables SAFE holders to choose among different staking mechanisms, possibly even simultaneously participating in different security models. The different available staking mechanisms could be governed by SafeDAO via an onchain registry, ensuring that they are aligned with SafeDAO’s interest and security standards.

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As a reminder, we’ll be hosting another community call later today to discuss the proposal. We are looking forward to your participation! Details:

  • Time:16:00-17:00 UTC
  • The call will be hosted on Discord. Sign up here
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Strategic focus

Service engine/Fee engine

From the abstraction layers that are mentioned, are there some that should be prioritized? Some that are not seen as important?

The “Fee Engine”, or I like as @LongHash_Ventures calls it the “value creation”, perhaps “service engine”, “value engine”, etc. are good names too, should be prioritized.

  • Determining which products and services the market is willing to pay for impacts everything else outlined here.
  • Building the “service engine” seems more possible to automate and iterate on than some of the other token utility initiatives that are important, but may require a lot more manual process.
  • This seems like the most effective way to create a sustainable funding model for initiatives like OBRA.

Balance of fees

It could be good to note in the proposal the goal of balancing fees

  • Core Safe functionality: Free and/or affordable for most end users
  • Advanced/organizational: Fair market rate

Safe yield market opportunities

@LuukDAO’s ideas on allocating a portion of SAFE tokens to yield earning opportunities above is interesting. Allocating a portion of the treasury to help fund some of these initiatives could make sense given the opportunities align with the Safe ecosystem, e.g. Open-source and decentralized Ethereum staking protocols.

Safe staking

Staking rewards that are a result of fees/revenue earned should be prioritized over incentivized rewards that come from token allocations. Fees/revenue if built well are sustainable whereas as incentivized allocations are more short-term.

Safe activity program

The actions mentioned here are a great start for measuring onchain activity and contributions. It’s important to also consider and potentially include offchain Safe activity here that contribute to the ecosystem, e.g SafeDAO forum, X, Farcaster, official Telegram group, documentation pull requests, etc.

[LongHash] Safe token distribution input

Thank you for clearly organizing a plan for token utility implementation @LongHash_Ventures!

Each of the categories apps, module developers, auditors & module curators, and fee engine solvers are important and cover different technical builders in the ecosystem.

  • Who decides on the “Token distribution” outlined?
  • The more this can agreed upon and automated through code the more sustainable these initiatives will be. This is why I like the focus on the service/value/fee engine as a strategic focus above.

Security abstraction (“Registry”)

An interesting proof-of-concept (PoC) for token gated registries could also be non-financial, such collaborating on information. A more decentralized version of the Safe ecosystem hub could be valuable to have apps and info added on a quick and ongoing basis. The info updating and consensus process would need to be determined by SafeDAO. Potentially voting on a council of editors, creating governance process, etc.

The Fileverse project is building on Safe and actively engaged with the community for their distributed and self-owned collaboration apps for writing, publishing, and more. Their platform could provide a way to manage the publishing and governance of this.

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Thanks for joining today’s community call. Please find below a high level summary. Note that the time of today’s community call was incorrectly shown in the Safe community calendar (as such two calls were held to still accommodate as many as possible). Apologies to the ones that didn’t join because of the confusion!

  • An overview was shared about the updated proposal that was posted today on the SafeDAO forum
  • Participants at the call generally appreciated the updated proposal by incorporating community feedback and thought that the two areas that were added (DeFi modules and SAFE Staking) are good starting points. Some participants also plan to read the update in more detail to provide additional thoughts
  • Furthermore, it was suggested to potentially launch a sprint to start narrowing down ideas further and see how the community can get involved in that process
  • On the Safe Activity Program, some points were raised, including ensuring it can be launched at at the appropriate time and considerations about it being gamed/farmed by groups that are not aligned with the ecosystem
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I fully agree that revenue generation, especially in relation to potential SAFE staking, should be the top priority.

As mentioned in yesterday’s Tokenomics call, I would love to (co)create a proposal in the next OBRA cycle to fund a Safe Token Utility Taskforce with the mandate to:

  1. Complete the initial list of Token Utility options,
  2. Organize options based on resources required and revenue potential
  3. Pick a set of 2-4 tangible use cases that should be prioritized and prescribe potential methods to test and implement these Token use cases.

@adamhurwitz.eth @LongHash_Ventures would love to connect sometime soon and explore if there are ways to collaborate on a Token Utility Taskforce.

I believe the current Safe Token Utility outline, especially with the additional focus on DeFi Features and SAFE Staking, provides enough framework to progress the SAFE Token forward and will signal readiness on this proposal.

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As a delegate with sufficient voting power , I can confirm that this is ready to move to a vote.

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As a delegate with sufficient voting power , I consider this proposal ready to move to a vote.

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As a delegate with sufficient voting power , I consider this proposal ready to move to a vote.

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FYI, two small additions were made to the proposal, following additional feedback received since the last update:

The following sentence was added to section “b. Proposed Utility / Use Case: Safe Activity Program”:

“(both onchain and offchain activity that is deemed valuable could potentially be considered, but also depends on factors such as technical feasibility).”

The following paragraph was added to section “c. Community Involvement”:

"Fee engine
Several community members highlighted the “fee engine” as an initial concept that should be prioritized and iterated on. In this respect, it is important to determine which products and services the market is willing to pay for. Another aspect is to balance fees (determine what should remain free/affordable and what a fair market rate could be)."

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As a delegate with sufficient voting power , I believed this proposal ready to move to a vote.

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As a delegate with sufficient voting power , we believe that this is ready to move to a vote!

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. As a delegate with sufficient voting power , we believe that this is ready to move to a vote!

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I really appreciate the work of everyone involved in putting this proposal together and I for my part will vote in favour of it.

I think the significance of this proposal can’t be overstated. It clearly defines pathways how SafeDAO could potentially one day create value for itself. Giving such an overview is really key when it comes to the value proposition of the token, independent of whether or not anything in this regard is actively worked on right now or in the near future. We’ve seen with UNI that the mere prospect of eventually having token utility beyond governance was enough to give it substantial value.

What I also liked is that the proposal clearly states what is out of scope: the base smart account functionality. Taking for example a fixed annual fee, such as 0.15%, of the $100B worth of assets secured, sounds like the stuff dreams are made of. But then reality sets in, and we all know that doing so would mean that Safe would die as we know it today. And taking a 0.15% fee from $0 in assets is $0 at the end of the day. Not decisively ruling this and similar extractive practices out would have significantly undermined Safe’s long-term goal of broad adoption of smart accounts.

I do have some questions in regards to the Safe Activity Program which will be “funded from the remaining user allocation”:

In SEP-5, 16.1M tokens were set aside for Allocation B, and since token redemption rate of Allocation A was only 58.05%, another 6.75M SAFE were again returned to the SafeDAO treasury. Added together this is 22.85M SAFE tokens (or 45.7% of the SAFE tokens of the user allocation) that are yet to be distributed. How many of those tokens will approximately be used in the initial 6 months the Safe Activity Program will run? Is it planned to announce the Safe Activity Program simultaneously with the token’s transferability, contingent, of course, on successful votes for both enabling transferability and adopting the Safe Token Utility framework?

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It’s so good! I like it.

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@Daniel the Safe Activity Program would function independently of the transferability event, where users can lock SAFE to increase their rewards should transferability become possible. The program’s schedule is intended to coincide with governance seasons and will be announced soon.

The allocation of tokens for the program will be dynamic. It will be determined for the inaugural season and adjusted for subsequent seasons (also based on factors such as the activity of users, stickiness of activities and the overall success and engagement levels)

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First of all, a big thank you to @Steven and everyone involved in crafting the Safe Token Utility proposal. I am casting my vote in support of it. This proposal outlines a definitive path toward enriching the utility of the SAFE token, perfectly aligning with SafeDAO’s strategic goals. I am eager to see the Safe Activity Program unfold, in enhancing participation and contributions within the Safe ecosystem.

Additionally, I commend the team’s dedication to encouraging community participation, ensuring that our collective insights significantly influence the SAFE token’s future trajectory. This proposal represents a critical juncture for the Safe Ecosystem, signaling our commitment to innovation, generating value, and fostering growth driven by our community.

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