INTERIM UPDATE 01/09/2025 08:45 UTC
Based on the feedback received from other participants and in order to simplify this proposal as much as possible, I’ve decided to remove the suggestion about changing the reward mechanism. Since each participant has their own vision of how this mechanism could be improved, trying to incorporate all these ideas would make the proposal unnecessarily complicated.
It will be more effective to focus the current proposal on just two key points:
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Whether to continue ASR (yes or no);
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The amount of rewards to be allocated for the upcoming ASR season (20M).
Any potential changes to the rewarding mechanism itself should be discussed and voted on separately in a dedicated proposal.
With these adjustments, the updated wording of the proposal is as follows:
I propose to use 20M CLOUD to fund rewards for active governance participants over the next six months.
Voters will receive a pro rata share of CLOUD based on their overall staking score earned during ASR Season 2 (staked CLOUD amount × time), multiplied by the number of proposals they participated in within ASR Season 2.
To be counted as participating in a proposal, one must have a minimum trading volume of at least 10 USDC in each proposal, regardless of if it passes or fails.
The entire upcoming 6-month ASR season is planned to run from the date of the last ASR-1 snapshot (25/08/2025) through 28/02/2026.
I propose splitting the 20M CLOUD allocation into two tranches of 10M each and distributing them quarterly. The plan is as follows:
- First tranche: distributed in December 2025 (covering the period from 25/08/2025 to 30/11/2025);
- Second tranche: distributed in March 2026 (covering the period from 25/08/2025 to 28/02/2026).
The mechanism for staking points and vote counting will remain the same as in Season 1. Any discussion of potential changes to this mechanism should be addressed in a separate proposal.
As a reminder, during Season 1:
- For the first tranche distribution, staking points accumulated during the first half of the season (first 3 months) and votes cast within that period were used.
- For the second tranche distribution, staking points accumulated over the entire season (6 months) and all votes cast during the season were taken into account.
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ORIGINAL PROPOSAL BELOW
1. Introduction
At this point, I’m not sure whether the team has any plans regarding the continuation of ASR rewards. Since no proposals have been submitted by others, I decided to prepare this draft to start a discussion on extending ASR.
The main reason why I believe ASR should continue is that the protocol is still in an active growth phase, where all current profits should be reinvested into expansion, market capture, revenue growth, and new products.
Because of this, we cannot rely on direct revenue redistribution to stakers in the near future. However, staking loses much of its attractiveness without ASR rewards.
To maintain staking motivation and reward long-term CLOUD holders, we need to allocate a dedicated pool of tokens for ASR. At this stage, the community fund is the most logical source for these rewards.
2. Key Discussion Points
2.1. Rethinking the ASR Rewards Distribution
The current ASR model can create certain challenges for newcomers and reduce incentives for active participation - especially if fewer proposals are put up for voting closer to the end of the ASR season. Another issue is that a user who voted only once but later sold all their tokens can still receive rewards for the entire remaining season by maintaining just the minimum required participation of 10 USDC (example highlighted in the attached community member’s comment).
While this behavior aligns with the original ASR design, I believe there’s an opportunity to improve fairness and better incentivize ongoing engagement.
Proposed change:
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Split the next ASR phase into two shorter rounds:
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ASR-3 → 3 months
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ASR-4 → next 3 months.
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Distribute rewards based on staking points accumulated during each 3-month period.
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Only votes cast within the same period should count toward reward eligibility.
This creates a cleaner and fairer system while giving new participants stronger incentives to stake and engage actively.
2.2. Determining the ASR Budget
Determining the ASR budget requires a long-term perspective - we need to ensure that community fund resources remain available for future strategic needs, while still keeping staking attractive and rewarding for participants.
Key assumptions (the following represent my personal perspective and subjective vision and are not a finalized plan):
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The community fund should last for at least 5 years.
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Expected fund usage includes:
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Providing incentives for INF-SOL liquidity;
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Potential future liquidity provision for CLOUD-USDC;
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Strategic initiatives, experiments, grants, etc.
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Suggested allocations (all numbers are approximate — the goal here is to estimate the available budget for ASR and understand potential constraints, not to propose a final distribution plan):
| Purpose | Suggested Allocation (M CLOUD) |
|---|---|
| INF-SOL liquidity incentives | 25M |
| Decentralized liquidity pools | 25M |
| Strategic reserves / potential “Wonderland”-style events (although I personally see limited value in such “Wonderland” given the team’s shift in focus toward the B2B segment) | 100M |
| Experiments, grants & initiatives | 30M |
| Total | 180M |
After the ASR-2 distribution, the remaining community reserve will be approximately 292M CLOUD. After accounting for the indicative allocations mentioned above, the estimated available balance would be around 112M CLOUD.
Estimated yearly allocation for ASR is → 112M CLOUD ÷ 5 years ≈ 22M CLOUD/year.
This revised model provides a clearer understanding of what the community fund can realistically support while ensuring long-term sustainability. It also indicates that allocating 60M CLOUD per year for ASR rewards would be unsustainable over time, highlighting the need to reduce ASR allocations.
The figures above are highly approximate, do not account for all factors, and are intended only to provide a rough illustration of potential allocation.
I also believe that a gradual reduction in rewards should be considered instead of a sharp decrease. The idea is as follows:
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Avoid a sharp and sudden decrease in ASR rewards;
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As Sanctum grows, ASR rewards in CLOUD should eventually be replaced with profit distribution mechanisms;
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Over time, the clarity and understanding of how the community reserve should be allocated will naturally improve.
My current preliminary vision for ASR rewards allocation is as follows (subject to change based on future developments and community discussions):
| Year | Proposed ASR Rewards (M CLOUD) |
|---|---|
| Year 1 | 40M |
| Year 2 | 30M |
| Year 3 | 20M |
| Year 4 | 15M |
| Year 5 | 10M |
| Total | 115M CLOUD |
This approach reflects a gradual reduction of ASR rewards over five years while allowing the community fund to maintain long-term sustainability and flexibility for future strategic needs.
Therefore, I propose allocating 20M CLOUD for the upcoming 6-month ASR period.
3. Updated Proposal: ASR-3 and ASR-4 Allocations
I propose allocating 20M CLOUD from the community reserve to support rewards for active governance participants over the next six months.
Key details:
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Voters will receive a pro-rata share of CLOUD, calculated as:
(staked CLOUD amount × staking duration) × number of votes participated in during the ASR round. -
Each ASR round (ASR-3 and ASR-4) lasts 3 months.
Staking scores and participating votes are calculated per round, not over the entire 6-month period. -
To qualify as an active participant in a proposal, a minimum trading volume of 10 USDC per proposal is required, regardless of whether the proposal passes or fails.
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The total 20M CLOUD allocation will be split into two equal tranches of 10M CLOUD each.
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Rewards will be distributed quarterly, with the first tranche expected to be distributed approximately 3 months after the passing of this proposal.
PS - I am not affiliated with the team and have no insight into whether there are any future plans regarding community reserve allocation, ASR, revenue distribution, etc. Everything outlined in this proposal reflects only my personal analysis and reasoning.
Someone had to raise the question about the future of ASR, and I decided to initiate this discussion.
I completely understand the desire to keep the system simple and balanced, and I agree simplicity is important. My thinking behind the continuity bonus was less about locking people in, and more about rewarding consistency in a way that strengthens governance.