# CIP-Draft: Should CowDAO consider revenue-share tokens to reduce COW sell pressure? **URL:** \ **Category:** Inactive Proposals\ **Tags:** cip, proposal\ **Created:** [August 4, 2022, 2:40pm UTC](https://forum.cow.fi/t/cip-draft-should-cowdao-consider-revenue-share-tokens-to-reduce-cow-sell-pressure/1066 "2022-08-04T14:40:26Z")\ **Posts on this page:** 1\ **Showing post:** 5
**Author:** ![Habs4lyfe](https://avatars.discourse-cdn.com/v4/letter/h/5e9695/32.png) [@Habs4lyfe](https://forum.cow.fi/u/Habs4lyfe)\ **Post date:** [August 9, 2022, 7:44pm UTC](https://forum.cow.fi/t/cip-draft-should-cowdao-consider-revenue-share-tokens-to-reduce-cow-sell-pressure/1066/5 "2022-08-09T19:44:17Z")
> [@fleupold](#): > > Clearly this is only true for profit sharing tokens. If a company has $100 in revenue and $100 in cost, assuming it gives away 50% of revenue, it would start making a loss and deplete its treasury. You are right, @fleupold, that the revenue-share token, taken together with other expenses and capital outlays, would not absolve the DAO from requiring treasury funds if revenues were insufficient to meet the sum of its obligations. My statement pertained to the revenue-share instrument by itself: because revenue-share payments are calculated as a % of revenue, they can never be greater than revenue. My apologies for this not being more clear. Like any form of financing that is not equity, the revenue-share tokens protect equity from being diluted (or treasury from being depleted) because they bring revenue from future years to the present, which is critically important considering this price environment and considering the potential sell pressure on the token and the impact on the DAO’s runway from excessive issuance. See below for an illustrative example of how moving money through time via revenue-share can reduce dilution or treasury depletion. ![Benefits of moving money through time](https://europe1.discourse-cdn.com/flex013/uploads/cow/original/1X/2049e18c47a1d02315bb9131fc9e2d61295c34b0.jpeg) **Revenue growth via partnerships** The key in the illustration above is the revenue growth, and I think we are all in agreement that _ **volume** _ is the critical requirement towards driving revenue increases the DAO. In this [discussion thread from the spring](https://forum.cow.fi/t/cip-draft-should-cow-introduce-vecow-incentives-and-a-revenue-source/772), @fleupold and @defiparasite you guys talked about veTokens and increasing fee revenue. Another thing that came up was network effects. While I don’t have an opinion on the fee increase, I tend to agree with what @0xSami\_ [posted over the weekend](https://mirror.xyz/samidefi.eth/yfr8BKXFRfyKwT2UEZJB_nmxmmrTVLZNz-hLk3-M8XQ) that distributing revenue in the form of dividends and share buy-backs should be reserved as later stage capital allocation decisions. That being said, issuing short duration revenue-share tokens to some of the institutional DeFi funds that seek sustainable yields could be an interesting way to increase the notoriety for CowDAO and kick-start network effects. Thinking about it further, there are 3 ways finding an institutional DeFi investor for short duration revenue-share tokens could help CowDAO drive trading volume (and therefore revenue growth): 1. CowDAO can promote the new partnership (earned media) 2. Institutional investor meets the team, tries using the product, and (hopefully 🤞) becomes a long-term repeat customer for CowDAO 3. Institutional investor becomes a brand ambassador, incentivized to promote CowDAO among other institutional players because they benefit from revenue increase via faster repayment Ultimately, revenue-share tokens can be used to bring on partners the same way native tokens are used. Issuing native tokens to partners is a well-trodden go-to-market path in DeFi and I think CowDAO could benefit from the same kind of publicity. As a shorter duration, less volatile, revenue-generating asset, revenue-share tokens would attract a different kind of investor than the COW token, thus broadening CowDAO’s partner base. What do you think? --- _[View the full topic](https://forum.cow.fi/t/cip-draft-should-cowdao-consider-revenue-share-tokens-to-reduce-cow-sell-pressure/1066)._