According to DefiLlama, the Fluid Protocol has generated about $110K of revenue per month on average since inception, mostly driven by a boom in 2024. Assuming Jupiter Lend revenue to Fluid (also sourced from DefiLlama) remains stable at an average of about $149K/mo, this puts total revenue for Fluid at $259K/mo using current numbers. Venus Flux revenue is not included here as it has relatively low TVL (due to it being a recent product), which would impact the numbers only slightly.
Under this proposal, over 96% of this identified revenue would be flowing directly to the new Foundation. This feels like a very high price (and risk) to pay for the benefits outlined in this proposal, which ultimately boil down to:
- IP ownership, and
- Facilitating institutional access.
While these would benefit FLUID holders, two questions came to mind when evaluating the proposal:
- Is the Fluid IP ever really at risk under the current structure?
- Is an annualized $3M the right price?
We believe that the answer to both questions is a clear no. For this reason, we propose a different funding structure that will ensure long-term Foundation alignment in the form of a lower base compensation for the foundation, but also the addition of a ‘commission’ structure, where in times that the Fluid Protocol generates more revenue, the Foundation can still benefit from booms. A simple implementation could be as follows:
Foundation Compensation = max(B, R * f), where B is a base compensation amount, R is the protocol’s revenue, and f is the commission factor.
This way, FLUID holders can ensure that the Foundation remains aligned with the token holders, while still funding the Foundation correctly. For example, using a base compensation of $50K/mo and a commission of 50%, YTD the Foundation would have been paid out a total compensation of an estimated (using the same DefiLlama statistics) $550K, an extra $50K over what the current proposal is asking for. However, throughout early 2025, Fluid reported losses, which caused FLUID holders to experience a much larger drawdown than the wider market (CoinGecko FLUID vs BTC*). In a situation like this under the proposed structure, the Foundation would be getting paid the exact same as during revenue booms, no incentive for the Foundation to improve revenue, while holders bleed. During this period, the base compensation would be applied to allow the team to cover basic expenses. Note that these are just exemplary numbers to demonstrate the mechanism.
Overall, the proposal is tempting, but requires either:
- A breakdown on how the $250K/mo will provide FLUID holders with adequate value, and drive protocol revenue long-term, or
- A restructure of the compensation plan
before the Fluid DAO should apply this change.