Silo Finance approves new revenue-sharing model for SILO holders to earn in USDC, ETH

Silo Labs’ latest governance voting to switch xSILO rewards to USD Coin and Ethereum has ended with staggering support for the new revenue-distribution model.

The proposal, launched 4 days ago, gauges whether the SILO community is interested in switching the reward-sharing framework from buyback and distribution to a direct distribution of USDC or Ethereum.

The voting has concluded with 21.1 million (96.98%) supporting shifting to USDC rewards and 411k (1.89%) Ethereum.

No participant abstained, while 248K (1.14%) preferred maintaining the existing reward-sharing framework.

Silo’s proposal suggested distributing half of the protocol revenue to its investors in USDC and Ethereum.

That meant switching from the current model of using capital to repurchase SILO assets before distributing incentives to holders.

The official blog post read:

Meanwhile, the results confirm a preference for USDC.

Nearly 97% of voters want to receive their rewards directly in USD Coin, indicating a rising desire for dollar-tied, predictable rewards.

Ethereum saw a modest preference, signalling appetite for financial stability in the volatility-prone asset class.

What’s next for xSILO holders

With the proposal approved, Silo Finance will convert 50% of its revenue into Ethereum or USDC and share it with xSILO investors.

That marks the end of the buyback model, which utilised revenue to buy SILO coins on the open market before distributing them to holders.

The change brings various benefits to the SILO community.

For instance, holders will enjoy predictable rewards.

USDC and Ethereum payouts are clear and tangible, unlike market-influenced buybacks.

Moreover, the updated model ensures incentives that are less impacted by market volatility.

These changes guarantee holder returns while gauging the feasibility of direct revenue distribution in the long term.

3-month trial starts in September

While the community overwhelmingly backed the transition, Silo Finance will conduct a pilot rollout.

The new revenue-sharing framework starts on September 1 and runs for 90 days.

After three months, the SILO community will review and evaluate whether the updated model offers intended benefits.

If successful, Silo Finance will adopt it as a permanent mechanism for distributing value among holders.

SILO price outlook

The native coin trades at $0.02170 after a nearly 4% decline on the daily chart.

Broad market declines as profit-booking contributes to SILO’s bearish stance.

Technical indicators suggest more pain, with prices poised for more dips before rebounding.

Nonetheless, the new revenue-sharing approach could supercharge the project’s growth.

Consistent USDC rewards might attract more individuals to stake xSILO, boosting the protocol’s utility and user engagement.

Native SILO will likely benefit from broader recognition and heightened network activity.