# Evolution of Social Escrow Rewards

**URL:** https://gov.velora.xyz/t/evolution-of-social-escrow-rewards/1834
**Category:** Research and Discussion
**Created:** [October 25, 2024, 9:22am UTC](https://gov.velora.xyz/t/evolution-of-social-escrow-rewards/1834 "2024-10-25T09:22:48Z")
**Posts on this page:** 1
**Showing post:** 4

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### Author: ![SEEDGov](https://dub1.discourse-cdn.com/flex013/user_avatar/gov.velora.xyz/seedgov/32/765_2.png) [@SEEDGov](https://gov.velora.xyz/u/SEEDGov)
#### Post date: [October 25, 2024, 3:25pm UTC](https://gov.velora.xyz/t/evolution-of-social-escrow-rewards/1834/4 "2024-10-25T15:25:47Z")

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We have already commented on a similar idea in another post - in this case to change the distribution of fees to stakers from the current 100% in ETH to 90% in ETH and 10% in sePSP1 - in the sense that it could have a positive impact, so we refer to it:

> [@Buy-Distribute OR Buy-Burn Mechanism for staker](https://gov.velora.xyz/t/buy-distribute-or-buy-burn-mechanism-for-staker/1767/16):
>
> Revisiting the idea of distributing to the stakers the fees 90%ETH / 10%PSP instead of 100% in ETH as today, and to throw another point of view to the debate we have given in [our previous comment](https://gov.velora.xyz/t/pip-54-buy-distribute-or-buy-burn-mechanism-for-staker/1767/13) and thinking about possible positive effects, it could be argued that what the staker does after receiving 10% of the distribution in PSP is a matter of the staker and that it cannot be assured that most of them will liquidate their entire position to return to ETH, we are talking about PSP stakers, i.e. users committed to the protocol. This proposed form of distribution at a certain point could link the price of PSP to the performance of the protocol, since as the spread between protocol performance and circulant increases, the impact on the purchase of PSP for distribution could theoretically generate an impact on the price, which in parallel further incentivizes the stake of 10% of PSP to be distributed.

However, we would like to reiterate the risks we have warned about, which could also lead to a change in the distribution of the 20% of the fees destined to the DAO treasury.

> [@Buy-Distribute OR Buy-Burn Mechanism for staker](https://gov.velora.xyz/t/buy-distribute-or-buy-burn-mechanism-for-staker/1767/13):
>
> Of the fees destined to the DAO’s treasury, 10% would be in PSP, which would negatively impact the diversification of the DAO’s treasury, which is currently mostly in PSP. Thus, it would reduce the DAO’s genuine capacity to carry out growth actions and attract talent without the need to sell PSP, which, if realized, would negatively impact its price.

The DAO treasury serves two basic functions: security and protocol growth. In both cases, it is counterproductive to concentrate 50% of the DAO’s treasury incomes in the protocol token - especially considering that a large portion of the DAO’s treasury is currently in the PSP - so the fees destined to the DAO’s treasury should be kept in ETH, or at most in the USDC or a combination of both. Therefore, we strongly recommend that the fees distribution destinated to the DAO’s treasury remain unchanged.

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