The RWA Rewards Program S1 is coming to an end. Overall it’s been a huge success, helping kickstart the re.al ecosystem, accruing TVL to protocols and introducing new users to the chain.

A few highlights:

• Over 1,000 users joined S1 of the rewards program, helping double the number of users currently on re.al

• Over $1.5MM in locked $RWA rewards were earned by program participants, with the rewards value at times increasing by 2.5x during the course of the season

• Over $600k in revenue was generated for existing veRWA holders, distributing nearly 200 reETH to the community participants in the past two months

• Onchain metrics saw significant growth at peak volume during August 2024

• Ecosystem protocols all experienced meaningful growth as a result of the inflow of new liquidity to the chian

• All this helped make re.al one of the fastest growing Arbitrum Orbit L2s

We’re thrilled with our success to date. We’ve succeeded without coordinated VC shilling, cabal support and during a period of extremely poor category sentiment, market volatility and an acceptance of financial nihilism.

It’s been an uphill battle and we’ve thrived by establishing new metas, thinking creatively about rewards, putting ourselves in the user’s position and building the types of products and programs we’d want to use.

And now, the topic everyone’s been waiting for, rewards distributions.

Rewards Distributions

The goal of this program has been to establish new ecosystem users, not just reward mercenary capital. This delivers on re.al’s thesis of sustainability:

• Consistent off-chain RWA yields are used to incentivize onchain liquidity

• Onchain activity generates community rewards through locked $RWA.

• These rewards are used as sustainable incentives for ecosystem developers, giving them a consistent source of yield to fund their work instead of simply accruing tokens to sell on.

re.al is still very early in its development process. We’ve only truly been in-market with growth and marketing for two months. And we’ve just started to establish the level of liquidity and active users that new protocols desire when evaluating their expansion plans to new chains.

It’s important we maintain the current momentum through the end of Season 2 at which time we believe we’ll have all the major pieces in place to establish re.al is a critical piece of DeFi infrastructure and primary destination for RWA liquidity. The opportunity is incredible and we can’t wait to continue grinding.

We view the $RWA rewards distributions as a TGE-type moment for the token and want to ensure we’re properly set-up to manage this with comprehensive market support. This work requires time and continued ecosystem development. That said, we also want to make sure that users are able to benefit now from the rewards they’ve worked hard to earn, sustainability supporting users, not just rewarding farmers.

Delegated veRWA and Claims

veRWA contains a mechanism where token owners can delegate their positions to new owners (users or protocols) allowing the delegated holder to accrue all of the rewards associated with their positions without the option to unlock or sell. Delegated veRWA was initially developed as a support mechanism for new ecosystem builders, allowing them to accrue reETH yield to fund their protocol while maintaining a sustainable pool of veRWA to use to fund future teams.

We’ll be using this feature as a phase in the rewards distribution process.

Season 1 participants will have their earned positions delegated to them for the duration of Season 2.

At the end of Season 2, veRWA positions will be claimable with ownership permanently transferred from the protocol to the new owner.

Here’s a look at what the process looks like over the remainder of the rewards program. Season 3 dates subject to change.

The delegation phase gives new users the chance to experience the value accrual from the chain, claiming reETH and helping convert them into long-term users, stakeholders in the ecosystem. Once we reach the claim date, they'll be free to do what they wish with their assets.

There is no claim necessary to collect the delegated assets, they’ll show up in the Lock tab of the re.al app when the user is logged in with their rewards program wallet. Delegated positions will be clearly marked.

Through this process, we’re also trying to improve upon some of the common complaints with rewards programs:

• All users, regardless of size, have the same terms. Whales are not locked up longer than other users, watching rewards value erode as a result of early sellers.

• There are no incremental capital requirements to claim reETH from delegated positions and ultimately claim veRWA rewards. It’s not fair to add new rules to claim the full value of what’s been earned. Users can leave the chain whenever they want without penalty to their accrued rewards.

As mentioned above, the team will use the delegation phase during Season 2 as an opportunity to grow the footprint of re.al, $RWA and best position the ecosystem for the claim period.

When claims are enabled, veRWA positions will be locked for three years. Both the delegated version and claimed version.

The three-year lock is necessary to maximize the rewards accrual during the delegation period. And in keeping with our focus on users not farmers, the unlock penalty on claimed veRWA is the best way to reward long-term holders, through increased yields and a permanent reduction in $RWA supply. More more information on veRWA, unlocks and burn penalties, please see the docs.

Keep in mind that veRWA positions can be split, allowing users to sell fractions of their positions, only accruing a burn penalty on the amount being unlocked.

What’s Next

We’ve shared our plans for the updates to Season 2, allocating rewards in a manner where we hope to attract new protocols and builders to the chain. New protocols (existing ecosystem protocols are excluded) will be eligible to earn up 25% of daily $RWA rewards in S2, helping them establish collective ownership and earn rewards in the chain they’re helping to grow.

We’re excited for the future of this ecosystem and community and can’t wait to make it re.al with all of you.