Inflation of SSV Token to Fund Core Team and Future Development

Proposals
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Inflation of SSV Token to Fund Core Team and Future Development

Proposal Details

The SSV core team is currently facing a financial shortfall, as we no longer have sufficient SSV tokens available for sale to support ongoing and future development efforts because we have sold all of our SSV token.

In order to ensure the continued progress and growth of the project, we propose the inflation of SSV tokens to fund the core team’s activities.

The amount is around mint 10% percent SSV token(which is around 6M USDT at current price) the team wallet.

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Unofficial content, today is not April 1st

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The DAO has recently passed DIP-26, which shall give answers to these questions:

:backhand_index_pointing_right: [DIP-26] ssv.network DAO Four-Year Budget (2024-2028)

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The key point is you need to set a hard limit of total $ssv token amount.

You can not always inflation $ssv token, that’s not good for every body, especially the $ssv holders who are you supporters at the beginning.

You can not just mint new $ssv token to do everything(market market, incentive, fund core team…) even though in the name of SSV DAO.

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Sure, you have a valid perspective. Do you mind sharing your ideas on how this could be handled instead? I’m sure people would love to hear your ideas.

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  • Mint all tokens in a single transaction — for example, if you aim to raise $50M, mint that amount in SSV tokens at a reasonable fully diluted valuation (e.g., $100M). Minting everything upfront provides clarity and eliminates future dilution fears. Gradual minting creates ongoing uncertainty — better to take the short-term pain than drag it out.
  • Renounce the admin role to build trust and signal decentralization.
  • Distribute the minted SSV to major VCs (e.g., a16z, Coinbase), market makers, or gradually sell into the market(current way).
  • Periodically burn SSV using revenue, reducing supply over time.
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Thanks for your thoughts. We’re always open to new ideas, but in my opinion, it’s a difficult problem without a perfect solution… The plan put forth in DIP-26 was a thoughtful attempt to balance the community’s goals and concerns (including those you presented here). I’ll give my “non-official” (i.e. mine alone) thoughts to give context and address your suggestions individually:

Mint all tokens as a single transaction

My opinion is that minting upfront is an unfavorable strategy, simply because there would be a high risk of poorly estimating how much funding the DAO will need long-term. SSV’s operational needs and its growth opportunities have been dynamic, and it was decided that having secure and dependable funding to sufficiently execute and adapt was critically important. The outstanding growth of the network to 100k+ validators and the upcoming launch of SSV 2.0 (despite its value being not yet realized) are both perfect examples of what has been achieved so far because of this ability to move fast and adapt. I understand that this is at the expense of some token supply uncertainty, but I think the long-term benefits greatly outweigh the short-term costs.

Renounce the admin role

I’m not sure what you mean by this? There’s no single person making these decisions… We have a diverse group of people that comprise the DAO operations, and all major decisions (including token mints) are determined by vote from the community (in this case, DIP-26).

Distribute the minted SSV

I’m not sure that I understand the intention of this… to lock the minted tokens so they cannot be immediately spent? If desired, this could be done with smart contracts, without the additional risk of new attack surfaces from third-parties custodying the treasury.

Periodically burn SSV

Totally agree, and this was actually passed within DIP-26. Since it was unknown how much revenue SSV would generate early, the decision was made to fund the project using minting (low uncertainty) rather than our revenue (high uncertainty). Then whatever revenue we did collect via network fees would be burned to offset the SSV minted… sort of like “borrowing” by minting and “repaying” by burning.

But yes, in my opinion, burning SSV is a very important piece of our token economics, which will be increasingly impactful as SSV continues to mature and grow. We’re still very early in the long-term vision of what SSV will become and the massive value that is possible to unlock, and I believe that burning has the potential to “undo” whatever mints are done.

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Voting can be easily manipulated, especially when a large portion of SSV tokens are held on centralized exchanges (CEXs). Many holders either aren’t aware of the governance process or simply aren’t motivated to withdraw and participate. This weakens the legitimacy of governance outcomes. Renouncing admin control could be a step toward a more decentralized and fair system.

SSV has a strong and ambitious roadmap, but executing it requires time, funding, and sustainable momentum. Minting and dumping a large number of tokens into the market without real buyer demand creates a reverse flywheel—rather than driving growth, it undermines it. Without sufficient liquidity, this approach risks crashing the token price and damaging long-term trust in the project.

What I’m proposing is this: mint a significant amount of SSV tokens in a single round and sell them to major venture capital firms like a16z or Coinbase—as has been done before. This brings in real funding without depending on the volatile open market.

And if no venture firm is willing to buy in? Then we should face that reality honestly: cut down the budget, scale back the targets, and build revenue step by step. It’s ridiculous for a project with only a $70M FDV to try raising $1M USDT each month through token sales for operations. That kind of mismatch between valuation and funding strategy is not sustainable.

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Thanks for the reply. I’ll emphasize again that these are only my opinions, because you hit on an issue that I have thoughts about and agree should be addressed.

Voting can easily be manipulated

In our case, I don’t think this is true. We have decent voting participation, especially because of our delegation program. In other words, there are enough people voting and diverse viewpoints. I personally know enough of our regular voters and delegates to say that we have a large number that understand the issues, vote to genuinely help SSV, and are willing to voice their concerns when they have them.

With that said, our voting won’t ever be perfect. CEX holders not voting is one example of a flaw. I think it is healthy enough though.

Minting and dumping a large number of tokens into the market without real buyer demand creates a reverse flywheel

Yes, I am with you here. I think we have been overspending in general, and I think that has been the primary reason for our token underperformance. But knowing the actual distributions and flows of the minted tokens, I think the main source of selling pressure is the incentivized mainnet program, by far. The operational/development budget is also high (and might need to be addressed too), but at least the large majority of these tokens seem to be held and have not been hitting the market.

This overspending has sort of been intentional, as part of what I would call SSV’s grand strategy: 1) grow the number of validators on SSV very quickly by subsidizing rewards, 2) leverage those validators to launch a based app layer, 3) create additional APR through these based apps and solidify SSV’s validator base, 4) grow more by leveraging our technical and economic advantages. We are currently transitioning from 1) to 2/3).

However, I understand that we are stretching ourselves to achieve this. In my opinion, we need to reduce or end the incentivized mainnet program as soon as possible, but we want to be careful to not jeopardize our validator base before SSV 2.0 is successfully launched. I think it’s an open question of what the impact would be if the incentivized mainnet ended, so caution is warranted. But I could also argue the other side and say that we have 100k+ validators… We’ve got plenty to move forward and don’t need to continue subsidizing.

I think the incentivized mainnet actually ended when we hit 100k validators (someone please correct me if I’m wrong), so we’re actually at a crossroads here anyway. We should be discussing what the future of this should be, if continued at all. I don’t have sufficient information… I would need to hear the opinions of our largest users. I think there’s actually a group researching this right now?

Regarding development spending, it’s trickier because this deals with staff, and there’s friction and cost when shrinking/expanding. Also, I won’t speak for them, but I think SSV Labs has a good runway and doesn’t have a critical funding need or anything. They would need to comment on their staffing needs though, how this would affect their roadmap and velocity, and what sacrifices might make sense, if any. Beyond that, DAO operations are relatively small, but there’s some room for cost-cutting here as well (already in discussion).

mint a significant amount of SSV tokens in a single round and sell them to major venture capital firms like a16z or Coinbase

Although this is possible (we used this method for our first fundraising round, with tokens locked), it might be especially challenging and inefficient right now. The one requirement is a pool of interested investors, which is not automatically available… anyone interested can simply buy SSV on the market right now, so why would there be any large investors sitting on the sidelines, especially in these market conditions? We could incentivize investors by offering a below-market rate, but then we are losing a lot of efficiency versus just selling directly to the market.

So I’m not sure of the best solution, but I agree that changes seem necessary soon because we are driving the token price down currently. Maybe the best path forward is just rushing toward SSV 2.0 and accepting the realities of additional sell pressure temporarily. Maybe it’s to minimize all spending and trust that we’ll retain most of our validators and momentum. Sounds like we need more information and discussion. Thoughts? (from others too)

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I strongly agree with you. The SSV team don’t have any money. I don’t know which kind of development costs around 15M dollars per year for an startup company.