As we get closer to the soft launch of Saffron Lido Vaults, a great conversation came up in Telegram last week:
How can we expand the utility of the $SFI token within the Saffron ecosystem?
We’re kicking off this thread to gather ideas and open the floor to the community. A few prompts to get us started:
Can we create new utilities for $SFI beyond governance?
What incentives could better reward liquidity providers and active users?
Are there novel staking mechanics or reward models worth exploring?
How can $SFI tie more deeply into protocol incentives (perhaps by supporting experimental vaults, soft launches, or new product pilots)?
This is a freeform brainstorm with the community - no need for polished proposals. Drop rough ideas, concepts, or even half-formed thoughts and let’s flesh them out together. Everything helps spark discussion.
Saffron has always thrived on the strength of its community. Whether you’re thinking about new ways to integrate $SFI into DeFi instruments, reward long-term holders, or expand its use in partner ecosystems, this is the place to share it.
Hi Dingo
I strongly believe diamond hand must be rewarded. Staking should be started. Profits % should go to staking reward. Buybacks of SFI to be distributed to stakers. Long time lockers should be rewarded more. Autocoumpound yield should be there, like YFI or BIFI, or FARM
Hey PKP, really appreciate you kicking this off with your thoughts.
Staking is definitely a tried and true model in DeFi, and there’s a solid case for rewarding long-term holders which is something that’s important to us as well. That said, just to play devil’s advocate for a moment:
Since $SFI has a capped supply and ~92% is already minted, staking rewards would likely need to come from the limited remaining supply. That could reduce our flexibility to incentivize future initiatives - like governance participation, ecosystem expansion, etc - if the rewards are front-loaded now.
Another angle worth thinking about: staking sometimes attracts short-term “mercenary” capital chasing yield, which can do more harm than good if the incentives aren’t aligned with the Saffron’s long-term health.
That said, I’d love to open up the discussion further.
Eric touched on something in Telegram last week about expanding utility for $SFI, and one possible way to connect these ideas could be through the Saffron Lido Vaults. For example, imagine a mechanism where users can lock up $SFI to reduce protocol fees - possibly on a sliding scale. It could be a way to reward loyalty and participation without introducing inflationary pressure.
Curious what others think:
Should rewards be tied more to protocol usage than token holding?
Would there be any kind of non-staking utilities would feel meaningful for long-term users?
Would SFI holders feel rewarded for having priority access to exclusive Saffron Lido Vaults?
Feel free to push back on any of this, this is all early-stage ideation - nothing here is a commitment - but exploring these tradeoffs together helps us think through what’s sustainable and what best serves the community long term.
Rewards should be exclusively tied to protocol success and usage. If the protocol doesn’t do well, the token is worthless anyways.
I like the idea of reducing fees via staking sfi. Perhaps, that can be combined with rewarding token holders/stakers with a percentage of earned fees as well in the long run.
It’s hard to say exactly what to do without knowing what kind of fees the protocol will generate, so a safe starting function would be what Dingo mentioned. Hold & stake tokens to reduce fees when entering the vault. Then if the protocol is successful enough, the holders/stakers can earn a percentage of fees generated by the vault as well. Also, obviously governance & voting weight based off of staked/held sfi should remain a function.
As the protocol expands into other avenues, more complicated/novel tokenomics can be considered. But with the current stages, these seem like the most viable options.
Thanks for chiming in, Eric - really appreciate your insights here.
Totally agree that tying rewards to protocol usage and success feels like the most sustainable long term approach. I also like the framing of starting simple and expanding over time which I think is especially important with how we’re “rebooting” Saffron. Using $SFI to reduce fees feels like a low-friction way to give the token immediate relevance and leaves the door open to more advanced mechanics down the line (IMO).
And I think anyone who chimes in here will also 100% agree - governance should remain a core pillar of SFI’s utility, especially as more community-driven decisions emerge as interest in the protocol picks back up.
In the interest of getting everything out on the table and opening up discussion what kinds of perks or access outside of reducing fees would feel meaningful in over the next year for utility for SFI? Does anyone have any token utility ideas that they’ve observed from other DeFi protocols that they think would be a good idea exploring with Saffron? There no right or wrong answers here. I know other users on the telegram have suggested “buybacks” and there’s been some contention whether or not burning would benefit long-term
I’m in favor of beginning slow and have utility revolve around reduced fees as Dingo and Eric mentioned. As the product matures and fees accumulate, I’m open to exploring the ideas of using fees for buy-backs, staking, or even marketing-related efforts to increase engagement and legitimacy of the product. I think a quarterly roundup and discussion would be a great idea, identifying the amount of accumulated fees and discuss options with the community on how to best utilize that funding.
I think a quarterly roundup and discussion would be a great idea, identifying the amount of accumulated fees and discuss options with the community on how to best utilize that funding.
This is also a great idea. Appreciate all of the constructive comments here, this is all incredibly helpful. Let me return this to the team.
