Proposal: FUEL Token Vesting Restructure and Liquidity Enhancement

General
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Thank you for the proposal @AgentChud, providing my response below.

1. Immediate Vesting of Purchaser Tokens

The core motivation of having the VCs in a 2y release, with no staking for locked tokens, was to give new community members better opportunity with staking at the opening of the project, in maximal fairness to the new community members.

However, I very much agree with your points broadly. An additional benefit would be the additional crypto economic security boost to having this portion be able to stake.

The negatives would be as follows:

  1. (high severity) Significant downside market pressure

  2. (moderate severity) New users would have a reduced staking reward, likely much closer to to the inflation rate

We conducted internal modeling with our advisors, who are experts on this, and it showed massive significant downside pressure (in the order of magnitude of 50-70%), which I doubt is what most of the community would want.

I’d be very concerned about this option as I don’t think it answers more of the important problems Fuel needs to solve for.

2. Price Floor Implementation

I can’t comment or endorse this manoeuvre, but I can provide some scenarios in a hypothetical market with a single buyer to help walk through our thinking here.

In a hypothetical market, with a potential 33% release:

  1. Unlock 33%, then create support (high risk)

  2. Create support, then unlock 33% (high risk)

  3. Create support, don’t unlock 33% (moderate risk)

The first option would likely create the most interesting results, but has a high risk of failure.

The second option has the biggest risk of failure, as the support would likely get taken out by the unlock, and the buyer would be out of luck and have less capital to work with.

The third option is the most boring option, but may help provide a confidence boost.

3. Enhanced Liquidity Provision

I can’t speak to any specific actions we could or would take here. But I can say that, as a part of ongoing efforts to support our ecosystem, we have supported providing liquidity for key pairs in the past.

So this kind of thing is not outside of our wheelhouse.

I want to thank the community for their input here. I understand people want action, so the team will be putting some things in place as soon as possible over the next week (1-10 days).

Focus on Developer Milestones / Other

Regarding what I think are some of the core problems we face today:

  1. Fuel does not yet have a central product/experience that showcases the infrastructure’s power or potential yet.

Much of the existing ecosystem is still very early and is only analogous or worse to existing experiences on other chains. This will not be enough to drive user growth or traffic to Fuel. It’s simply not interesting enough yet.

Bako, for example, does a great job in many respects as a reliable product leveraging Fuel’s unique native features, but it’s core infra as a wallet – not something that will turn heads in the current landscape.

I’m grateful for the ecosystem and many apps are making great progress, but it’s early and there are still a lot of growing pains.

Solving for this (i.e. the “why Fuel”) also means its becomes a lot easier to explain Fuel to others (think GMX for Arbitrum), showcase its potential to other developers, improve marketing/mindshare funnels, drive user growth for the ecosystem and most importantly, actually solve problems for users in and outside of crypto today.

  1. Additionally, FS-1 has not been very effective at driving user growth, as there are much more competitive programs out there and without an anchor product/experience actually driving user growth, the program largely just retains existing capital but not much else.

  2. Our marketing and branding doesn’t yet match the engineering prowess, boldness and clarity of the underlying infrastructure. It neither attracts attention nor represents us – yet.

  3. The community has broken moderation practices (namely due to the mods being under resourced), Discord has become a vortex of negativity and without better profiling of community members, it’s become hard to tell apart different members and what they uniquely bring to the community, or how to best address their needs.

The team is working on everything above and I’ll be addressing these areas and more in detail in my next blog post. The post aims to provide a blueprint of Fuel’s high level strategy for the next few quarters and bring everyone in on how we want to roll Fuel out to the masses.

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