Gas Fee Reimbursement Info for ReserveLending

ReserveLending Gas Fee Reimbursement Information

Since the original announcement above was made on Howard’s and Ryan’s town hall from Disney®, there has been an extremely low amount of eRSDL moved over to the new uneRSDL supply. There a number of reasons for this, but the most obvious is that it costs gas to make the switch.

We will repay gas for migrating supply from the eRSDL Legacy pool to the new eRSDL pool on a good faith basis provided evidence of the transfer is provided and it is determined that gamenship was not employed to exploit this generous offer.

Overall, we are presenting this plan to the community to signal and notify us accordingly if this would be enough incentive to move over to the new uneRSDL supply.

We ask for feedback on this plan or any alternatives that would incentivize folks to move over in order to meet the 60-70% goal stated above. This Forum post has been created for discussion on this topic.

Thanks Mandy for kickstarting this. I wrote a post about this too on the Forum, and there was good discussion in the thread about this already.

https://forum.unfederalreserve.com/t/why-people-are-not-un-staking-their-legacy-ersdl-and-migrating-to-new-contract/240?u=daemon

TLDR: from where I’m sitting there’s still not a strong incentive to move to the new contract. Even the ETH gas reimbursement (now paid as an eRSDL reimbursement?) is $300 max, paid in eRSDL, which isn’t a strong enough incentive. Unless you plan to HODL the $300 airdropped eRSDL for a while (to allow for a ramp up in price action) it’s not really clicking for me as a great mechanism to convince anyone to migrate to the new contract (consider you’ll need around $100 in ETH gas to sell that eRSDL one day or migrate it to Kucoin which has fees too).

Furthermore, in regards to the new migration and lowered collateral factor, I’m not convinced from reading today’s Medium post (or past Medium articles) how assured everyone is that the lowered collateral factor will dramatically fix the underlying liquidity issue on RL, and I welcome Ryan and Howard to discuss why new marketing will greatly improve the products illiquidity.

Ultimately the underlying issue is the dramatically high ETH gas fees, and until the team provides a L2 or L1 solution that makes utilizing the product affordable, we’re in a bind. I welcome more thoughts, and appreciate the team for making efforts to remedy the issue but frankly and respectfully don’t see this as a remedy or believe enough will be incentivized by this eRSDL airdrop “gas reimbursement” mechanism.

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OK great, do you want me to delete the one I posted then? and I can relink the article to your post? I don’t mind at all, just let me know if that would be best. Thanks so much!

Hi Mandy, I’m not sure the community feels there’s any incentive to migrate to the new contract. What do we have to gain from doing so? The reimbursement is not an actual reimbursement as I’ve shared above given the pay-out is in eRSDL and not ETH and wouldn’t cover the x-fer back to ETH after the gas fees are counted.

And based on reviewing the Discord channels and speaking to folks on Twitter, there’s consensus the increasing ambiguity on the tokenomics re: “buy backs”, when RF will launch, what will happen after the first $200,000 vault is opened, and what all of this means for the future of RB2B are of careful concern to us all.

In regards to the migration to the new contract, the outstanding illiquidity has been an issue since the inception of Reserve Lending. How can the team assure us that marketing the product will improve the user experience in this way? I’m still not entirely convinced marketing alone will remedy the illiquidity, maybe if the team can articulate what the marketing plan would entail, and share in more detail how they conceive of the lower collateral factor amending the illiquidity there’d be more incentive to go along with participating. Is that fair to say?

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Hi Mandy, bit of a noob question but does it help unfed to have then to have ersdl supplied to the platform then? I had mine sitting on the legacy platform from when there used to be some return apy for it. I have removed it after the Disney town hall but since i wasn’t planning to borrow against it, i have not bothered to resupply. If it helps Unfed for me to resupply though, i am more then happy to.

Just wanted to add here that I also am confused by the decision to reimburse legacy suppliers who move to the new pool in eRSDL as opposed to ETH. Can we get some clarification for the team on WHY this was decided? Was it somehow safer from a compliance standpoint to airdrop eRSDL vs ETH? I feel I speak for many when I say i’d much rather be repaid in ETH, the currency that I spent to make the transactions than eRSDL which i’d need to pay another hefty gas fee to actually liquidate and get my gas money back. I’m appreciative that the team is offering to reimburse legacy suppliers, but i’d really like some communication on the team regarding this decision. You guys are busy but the community would really appreciate more transparent communication around this issue. Hoping this will be resolved asap so you can focus on the marketing PUSH for the reserve funding launch

The lack of communication from the team lately on questions raised in the Forum have been confounding. More-so because they encourage communication here from their social platforms and recent calls (thinking of the one with Semper). I hope that Howard and Ryan can start addressing each question directly that has been posited in the Forum recently tomorrow in their AMA.

As to why RSDL was decided as the pay-out vs. ETH for gas reimbursement?

My hunch is because the team can rely on their own treasury to pay in eRSDL instead of in ETH. Regardless it doesn’t help the community to get paid in a token as volatile as eRSDL when we would expect reimbursement in the gas fee which is ETH.

Benn followed up with the team as a similar question was asked on Discord.

The answer to that was, to reimburse in ETH the team would have to get it from somewhere and given market depth - swapping eRSDL to get the budgeted amount in ETH would have a detrimental effect on the folks that the team are trying to help in this situation.

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If the team put their 5 keys into effect they would source the ETH from their own pockets or an outside investment (not using the eRSDL treasury, by selling eRSDL into ETH and further negatively impacting the eRSDL price).

You’re asking folks to migrate to a new contract (with lower collateral utilization) along with zero incentives for any retail investor, other than the possibility of launching a marketing campaign to improve liquidity, but we’re not convinced you can market a product that is unusable to 95% of the community considering the gas fees are outrageous on ETH L1.

The elephant in the room is the exorbitant ETH gas fees. Until a L1 or L2 solution is introduced the project will remain illiquid IMO. Why invest in a protocol that locks your liquidity (unable to know when you’ll get it back), despite it offering 30% APY, when you can find better R/R with projects like OHM (which eRSDL has also invested in).

The larger concern I have is RF too, and if it will attract capital beyond this $200,000 vault and how that will bridge into RB2B. i’m worried this project is sorely suffering from transparency from the team on its efforts to mitigate the outstanding liquidity issues and instead feel like we get the run-around each time we ask for a explanation on decision making and what’s a priority. I don’t want to see borrows turned off to “fix” RL either. If RL isn’t working efficiently, how can the team expect banks to trust eRSDL? I hope there’s a solution here and expect the community to hold the team accountable for these choices as we’re all in this together.

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We will discuss this on this evening’s town hall for sure. I can address the first sentence right off the bat. Company resources would be used to address the issue, and not commingled with personal funds. Outside investors are interested in new products and would not provide capital if the thesis for those funds was solely be to help folks to untangle positions. (Check the wallets and you’ll see the migration and the stablecoin lock-up is due to a small, small group of individuals.)

Agree on gas fees being high, and heard that ETH-based systems are largely moving out of the realm of the average retail customer. Still, 70% of all transaction occur on ETH rails.

Priority [IN ORDER OF IMPORTANCE]:

  • ReserveFunding - providing an off-ramp to traditional alternative investments from folks that have crypto gains that they want to hedge to non eth-correlated assets.
  • ReserveLending/$eRSDL ecosystem - enhancing user experience via partnership with large exchange, freeing up liquidity using either carrots or sticks.
  • ReserveLending+ - KYC’d platform (potentially on a new L1/L2) still open.
  • RB2B - with the first 6 to 8 RF recipients, create a safe DeFI harbor for them.

I feel like we are being held accountable and we are more transparent than ANY OTHER PROJECT in blockchain, and I would encourage anyone who feels like their needs are not being served, to respond here or reach out to me directly!

-howard

I think the community would appreciate if company resources utilized reimbursing people in ETH and not eRSDL as that would require them to sell eRSDL (with their own ETH gas) to get the ETH they used to migrate to the new contract. I hope on tonight’s AMA you can address why ETH won’t be the reimbursement mechanism.

I am hopeful that crypto investors want to invest in traditional alternative investments but my gut is that most people in crypto are in crypto for higher returns and can easily yield farm higher returns than 10% APY even in a bear market. But if offering RF as a bridge to RB2B is part of the team’s thesis I can’t argue with that.

If a T1 exchange (Coinbase, Binance US, etc.) improves liquidity for the token, I would hope that correlates to resolving the liquidity issue on RL, but still see the ETH gas issue without a L2 or alternative L1 solution as being more important to reconcile.

For example, RL could offer customers the ability to stay on ETH but utilize Arbitrum technology and make accessing the on/off ramps much more affordable. What does everyone else think?

Not speaking on behalf of the team here, but from my own career experience within software.

Migrating an existing platform to a L2 solution seems like it could be a large amount of work. Until the team has fully completed the initial work for the RF launch, I don’t think it can be looked at as a quick solution for this current issue.

I would love to see one of the products on a L2 and I am a huge fan of Arbitrum.

But, take into consideration what is realistic for developers. More speed often comes at the cost of quality, and shipping good products isn’t something that is easily solved by adding more developers (quite often this has the opposite effect).

In addition, you don’t want to burn out your developers as they’ll walk away entirely which leads to more issues from a project management perspective.

Developing quality software products is difficult (I assume even more so in this space than the traditional software industry) and we need to respect the timeframes that it takes to develop those products.

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Appreciate that PM.

It would be beneficial if the team addressed this in as nuanced a way as you described here in the Forum.

I’m empathetic to the reality that onboarding more engineers to offer an L2 solution for RL might be more difficult and time intensive than I think it is. And if the team focusing on getting RF out first, so be it. But on the flip side, a lot of the community is in the dark about why these two things can’t be achieved simultaneously or have a sense of if the team plans to even approach doing an L2 solution at all for RL. I’m saying that having chatted in Discord with many who are curious why we can’t have more affordable access to the platform.

A while back the team said they were looking into AVAX, a lot of people got excited, and then crickets… More consistent dialogue about these features being considered, implemented, and roadmapped helps us all know what we’re in for.

Why wouldnt you hire more than one development team if you are already outsourcing all of it? Only one goal at a time, wouldnt want to overwhelm expectations :*(

Co-ordinating across different teams adds another layer of complexity. Developing good quality software is challenging.

Adding more engineers does not solve the problem and it can often make the problem more complex. If you’re interested in why, check out “Brook’s Law” on Wikipedia.

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Does anyone at ERSDL know when the gas fee reimbursement (for the unstaking and restaking process completed on the lending platform for the old tokens to new tokens) is scheduled to be issued. Can not find any specific information on this. Thank you.

Hey there,

It should be done in the upcoming sprint that the team is working on - apologies for no specific date on this.

As soon as I hear more information I’ll get back to you on this.

Thanks.

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Thank you for the fast response PM5100!

Hi PM5100 anything on the gas fee reimbursement yet. Thank you.