Authorize $500k of DXD buybacks with new parameters [Proposal]

DAOtalk falls short, because I wish I could post without replying to someone, it’s not necessarily a retort to a particular person, this is a wide encompasing topic and it concerns everyone.

CRV is down 97.70%
AAVE is down 84.97%

To me oftentimes, a lot of the convo feels like: let’s close shop and liquidate, cash out. Is there a buyback - there is. Let’s just not obsess with it. If anything, the community needs advice and support on the roadmap. 3 years of runway in this bear is an amazing feat accomplished by exemplary conservative actions in the past. Neglecting it and neglecting the future, and focusing on the buyback is weird. There is potential for so much more, but there is this looming distraction with how many buyback orders we did this week, 'rapido, rapido!..". No one is against it, it’s happening, but I wish to see forum posts with product ideas and improvement proposals. People may not be satisfied, but even the current stack is impressive. The gov system that’s built is unparalleled. It can be monetized.
The DEX is literally the only one in the entire DeFi giving traders the peace of mind with regards to frontend attacks, now offering MEV protection as well. There are ways to tap into it. Carrot is a true gem, v1 will rock. We’re developing Jolt. There’s Nimi. The community has achievements to be proud of and its portrayed as a total failure, with even worse expectations for the future.

The buyback is happening.


I haven’t heard anyone call for that resolution for years, and I specifically said this isn’t the case above if you take a look. Please, don’t misrepresent me or DXD holders in general. I appreciate that comms over text can be tough to interpret, but it’s a recurrent theme in your posts, and I think it’s an easy but inaccurate way to paint DXD holders in a bad light.

I’ve made it plainly clear that I’m open minded to the future mechanism to deliver value. I just take issue with the move back in comms towards a rhetoric of ‘Let’s just keep going as we are, and product revenues will support DXD in the future’. That is not a comforting value accrual mechanism for DXD holders given product revenues are nowhere close to sustaining the DAO’s expenses after 3 years, let alone anything for DXD holders - it’s just a fact, I mean no offence by it, so please don’t take it personally.

What I am obsessing over, however, and think there isn’t enough obsession over, is that money is being spent without pre-emptive analysis, and seemingly no serious pause, over whether it will return at least 1x said spend. This money could be spent on a buyback (returns >1x spend to remaining DXD holders), a dividend (returns 1x spend to current DXD holders), other products that are likely to return 1x spend. I don’t really care what - the important thing is that spend is likely to return >1x. This is just rudimentary logic - would you spend $1 if your expected return in future on that $1 is less than $1?

I think you’ve missed the point of the post entirely. It was as far removed from the buyback as possible. It focused more on your previous post implying that we are back to a world where DXD holders are reliant on product revenues to be the main value accrual mechanism we can count on. If this is the case as you imply, then we have to look at current and future product revenues; neither of which provide much comfort to DXD holders, and render this of extremely limited value. The point is to change this fact.

I commend that, sincerely, but it’s not translating to anywhere close to what’s spent on it in fees, and that is the bottom line. The PMF isn’t there, and the revenues vs. the spend show that quite clearly. I appreciate that it’s not nice to hear, but I’m not sure how one can make a case against the numbers, and if the likelihood of recouping future spend on it is low (let alone turn a profit on future spend), then why continue to pour resources into it, rather than pour the cash, and more importantly contributor talent, into something which is likely to do so, based on pre-spend analysis?

So that I’m not misrepresented further, to be clear: I’m all for building products where it makes sense. I think DXgov, for example, is a key piece of infrastructure that could be widely used and adopted across the DeFi landscape. However, I think it’s negligent towards the DAO’s longevity and existence, as you put it, to continue to build products that are unlikely to produce a return on spend, so that the DAO can continue past the next 3 years. Otherwise, DXdao ceases to exist past 2025/2026 at the current burn rate. This should be concerning to everyone involved with the DAO, but especially DXD holders who haven’t received a dividend in 3 years, and essentially lose everything invested if no product revenues are produced in the next 3 years either.

If Swapr, or any other product, is going to produce a positive return on spend, great, but we should be showing an analysis of what the expected revenues are, when they are likely to begin, why we expect that (what’s going to change between now and then, with data to support), etc. before the spend occurs. I’m afraid, in my opinion, ‘Carrot is a true gem, v1 will rock’ is a prime example of a lack of rigorous analysis prior to spend on future expected return.

Please, don’t gaslight me. My post merely highlights that money should only be spent when the future expectation for return is positive, and that I don’t think that analysis is currently happening. It’s a call for change, and improvement. If it’s not possible for people, namely DXD holders, to provide this kind of feedback without this kind of response, then DXdao will just continue to be an echo chamber for contributors. Further, the post was in direct response to your comments that lead me to believe that we are heading back to ‘DXD holders just need to wait for product revenues, be patient’, without any indication of what those expected revenues are expected to be, nor a track record of any product revenues to date. If you are calling for DXD product revenues to become a larger proportion of the value accrual mechanism than at present, then it’s obvious that those DXD product revenues are going to face greater scrutiny and focus in the conversation. You may think this analysis is quite frank, but you cannot argue with its grounding in reality.

tl;dr: Should we be spending money where expected future return is <1x? My post says nothing more than the answer to this question should be a resounding no.

I’m not sure if something got lost in conversation with your insistence to bring your response back to the buyback; that was not the focus of the post - in fact, the word buyback does not appear once in its entirety.


also, your data for Curve (and potentially other protocols, but I spotted Curve immediately) is wildly incorrect - see Dune for correct base yield on veCRV; but you also have to account for bribe yields, which are significant. I wasn’t sure what the point of highlighting those protocols was to answering the key question of whether spending for <1x ROC was ever sensible, but I thought it was important to correct the data regardless.

It’s worth noting the runway isn’t only 3y, that’s the runway when ether is hodled. If the community doesn’t work to improve fundamentals, their vested tokens won’t be worth much. There is an incentive to improve roadmap and create revenue streams. If the goal is to buyback and cash out unvested dxd to usdc, then that’s different from running a business. I happen to see people dedicated to doing the right thing, and don’t want to share the negativity. Whether the community believes it will succeed or not, either way it’s right. When someone shares their honest opinion it should not be attacked. Stressed out people don’t work well.

3y vs. 3y6mo based on if/when we sell ether, the point is the same. It runs out sooner rather than later if product revenues over the next 3y match the previous 3y. Hence the desire to change that outcome.

So, rather than addressing the issue and looking to change course, we’ll continue down the path of spending huge amounts on very little sustainable revenue, rather than assessing whether the current spend, and talent, is better spent/used elsewhere.

For a fear of stress.

Not to mention that you continue to pretend that this is about me wanting the treasury liquidated:

No, it’s not the goal, as I have repeatedly told you over many months, Nathan. Your persistent implication that it is is insulting, and part of the reason you may feel that my responses are negative - I have to put you right on this point very firmly.

I always go to great lengths, for your benefit, to repeat that spending the cash elsewhere, on products and activities that are >1x ROC, is what matters. This ‘liquidate the treasury’ strawman argument is only ever brought to the conversation by yourself.

Have a good night. Hopefully I can relieve the stress I’m feeling about my DXD trending to $0 over 3 (or 3.5) years if things continue on this path of refusing to tackle difficult issues until it’s too late, just because we don’t need to yet with a treasury flush with cash. Fingers crossed!

Say whatever about text not being the perfect medium, but I think that the conversation has veered off course and isn’t productive.

@Arhat , Conor has himself been pushing to move away from the buyback to a mechanic that is more long term.

That discussion will take place in the DXD working group to brainstorm and hopefully produce a suitable long term mechanic.

The above proposal for a buyback is to cover the short to medium term until the outcome of the working group is implemented. Buybacks in this context are not a distraction but the actual topic at hand.

Why not constrain the discussion here to the structure and format of the short to medium term buyback; so that we can move it forward. And if you feel a revenue-only driven model is the best option for DXD you can outline your idea in the DXD working group?

That way the conversation at hand here isn’t railroaded.


Fair comments. Last I’ll say on it, then: I am just not going to be made out to be some vulture looking to liquidate the DAO treasury when I have been continuously adding to my DXD position for 694 days now, with my first large buys bought at a price of over 0.7E, as well as engaging in discussions on how to best proceed for the benefit of the DAO and DXD holders throughout that time. The insistence to perpetually paint me out to be someone that’s seen a large treasury, bought the bottom, and now gunning for liquidation, is insulting, untrue, and breaks down any attempt at productivity - yet, it’s every single time any comment is made that tries to give DXD holders a fair shot at realising some value. This is repeatedly pointed out, but never taken on board by the indiviual, and gaslighting continues.

Said my piece, hopefully this time it gets through. Signing off & won’t be posting again on the matter until the DXD working group. Cheers


First, agree with @0xSpicySoup that makes sense to keep this thread scoped to its topic, and take other discussions to other threads.

But just wanted to say that as a long time Contibutor, REP holder, and DXD holder, I deeply appreciate @hughesconnor’s view points here, skin in the game, and desire to see DXdao have some honest self assessment, which I share.

I also appreciate @Arhat’s commitment and ever present optimism. He plays an important role in the community by always being ready to engage with DXdao community members across all DXdao communication channels. I also share his skepticism of the type of DXD holder the buyback might attract. That’s clearly not Connor though. See his post here.

Also for the record, there are roughly 3 years of runway at current burn rates when looking at stablecoins in the treasury (~$12M), but there is also over 12K ETH, which at current prices would well over double this runway.


I wanted to circle back here and drive towards consensus.

To recap, there is 51 WETH in the GP Relayer with two buyback proposals currently in boosted or pending boosted. The DXD Buyback Extension #9 proposal, which would extend for the last 107 ETH in the buyback reserve, is live on mainnet and Gnosis Chain. Depending on the price of ETH & DXD volume, that could take around 20 orders to get through, so I think it’s important to try and reach consensus and submit a proposal before the end of next week.

The proposal uses two different levers to try and get to a consensus solution. These are:

  • Circulating supply - this is the numerator for a DXD/NAV calculation.
  • Treasury NAV - the value of the treasury used for DXD/NAV calculations. Previously, this was ETH, staked ETH, Swapr LPs and Stablecoins.

For circulating supply there are a couple considerations & suggestions. @hughesconnor suggested that re-purchased DXD not count towards circulating supply, while @JohnKelleher points out that this DXD would be in the general treasury, where other DXD is not counted as circulating supply. Additionally, @0xSpicySoup & @hughesconnor suggest not counting the DXD that is vesting, which is around 2500 DXD that currently counts as circulating that would not.

For treasury NAV calculation, there are two new elements, 1. A total treasury calculation 2. Runway to be subtracted from NAV.

  1. For the total treasury calculation, I agree with John that there isn’t much of a market price for SWPR, but in the event that SWPR token did 2x or 3x, I think it’s reasonable to expect DXD holders to partake in some of that upside. And if SWPR price did increase a bunch, that would presumably mean good things for runway. I don’t think this affects the treasury calculation that much (it increases it by $2m), but I think it’s important that DXD holders have an upside in Swapr’s success, especially considering it’s the only revenue source for DXdao at the moment. This also applies to DXventures investments, where there is not a clear value translated back to DXD holders.

  2. Runway calculations. There is the runway number that can be adjusted ($290k) as well as the years to be subtracted (2.5 years, which would be $8.7m). Both of these are adjustable and curious to hear others thoughts

Also up for discussion - but seems like there’s agreement - is using 70% figure for circulating marketcap/ treasury NAV.

And then there are smaller things that can be adjusted.

The $500k authorization amount, for instance, should alleviate any concerns of a death spiral. This is not a blank check from the treasury, but a short-term fix to signal alignment and drive value to DXD. The proposal has $500k because the ADTV has dropped precipitously (fallen by almost 70% over the last six months), so the size was reduced to fall in line with that. There’s also a benefit to governance re-authorizing because it forces a conversation on the program. And the 3 orders over 7 days was a way to spread the orders out, given this program occurs in a different market environment than in 2021.

Given the new structure of this, I’m not sure it makes sense to commit to a long-term program @0xSpicySoup (the first buyback program was also just a one-off). But the proposal will surely set a precedent should this continue in the future, hence why it’s important to discuss the treasury/runway because it will form the foundation for future conversations. There is also an opportunity to include future commitments of DXdao, like the DXD Token Working Group. I will work on inserting some language that captures the current thoughts.

Discussing on Governance Discussion today!


Gonna be a bit controversial.

I’ve mentioned this in the latest community call – I don’t think DXdao should continue doing buybacks. DXD is undervalued and I think the market needs to realize this, trying to “interrupt with the free market” is in general a futile effort.

DXdao efforts should be focused on creating more value for DXD through usage and utility like DXD in holographic consensus, DXD staking schemes, value accrual methods and more.

As a long term DXD holder I think these buybacks are beneficial for short term speculators of DXD, and do not serve the long term interest of the DAO.

People who bought DXD have invested in the long term vision of this DAO, we are in the early-middle stages of building this vision. Those who are not interested in it and go ahead and sell their DXD. We should be confident in our ability to drive value to DXD in the mid/long terms, short terms don’t matter, especially during a bear market.

I just want to put this opinion out there, not trying to put any wrench in the works, but I think we should seriously consider additional buybacks.


I am thinking that the goal here is not to “interrupt free markets”.

But if DXD is massively undervalued, why wouldn’t the DAO want to buy DXD at a very cheap price?

Is it undervalued? Is it a cheap price?

If it’s buying DXD from short term holders, is that ok? Then the short term holders leave, and only longer term holders have DXD.

Like I said on the today’s call, DXdao is trading ETH for DXD. Both are assets, both are likely undervalued. DXdao already has both.

So, I think a more important question is “what is more undervalued - DXD or ETH?”

Answering that can help drive decision making and paths forward.


Okay, me keeping my mouth shut was never realistic :stuck_out_tongue:. But while I also agree that the buyback is not the most efficient method to capitalize on the current situation for the DAO, this is the angle I take issue with and feel strongly that I have to push back on before it grows - I think we’ve been saying this for 3 years now and I tend to feel like it’s quite a vague, wishy washy statement that allows for a lot of unintentional procrastination wrt delivering value back to DXD holders, especially given the current conversations in the forums surrounding sustainability, product revenues, etc. ‘We should be confident in the long term’ doesn’t really give much confidence to DXD holders, as it’s neither a plan or laying out measurable goals that can be retrospectively analysed, and unfortunately there has been little in the way of value creation for DXD holders since DXdao’s inception, other than the buyback - so taking it away without another concrete plan is unlikely to go down well. If we first lay out alternative methods to do this, then I think it is more palatable to DXD holders than stopping the buyback in the short term with an ‘in the long run we’ll deliver value’ message at a kind of take-our-word-for-it level, without a track record for doing so. Once an alternative proposition is in place, then I think your post makes much more sense. Otherwise, it kind of feels like 2020 again where a lot of DXD holders felt a little left hung out to dry with no give and take. Again, I’m not against stopping the buyback at all, but only once something else either complements it, or replaces it, that gives DXD holders a reason to hold/stake DXD. I think having the conversation to stop them first is the wrong way to think about things, just my opinion.

I also don’t think the bear market argument is really too strong, seeing as we weren’t doing the opposite of pushing super hard to deliver excessive value to DXD holders during the bull market. Again, I think compromise and give-and-take are important; being consistent with the arguments and narratives we make.


On this point I’ve no objection to spreading orders and doing 3 over 7 days. I just want to make sure this commits to 3 buybacks a week. The way the OP was worded to just capped at max 3 orders in 7 days, but obviously could have been less. I’d like to have this clarified to no more and no less. So long as it’s reasonably possible to execute 3 orders, which in most cases it should be.

Not to push back too hard but this but this bit seems a bit contradictory. We’re discussing making changes to the buyback format so as to avoid a death spiral where the treasury is drained by buybacks. But at the same time the value of buybacks are dropping considerably lower due to falling ADTV.

Wouldn’t that negate a lot of the rationale for changing the buyback format in the short term?

If the buyback size is currently low, dropping lower and unlikely to increase dramatically in the short term (and the buyback program is a short term one only); then there’s no need to amend to add a carve out for runway and revising the way circulating supply is counted.

If increasing ADTV in the medium term means there’s a potential threat of death spiral, then that suggests an intention to continue in the medium term (at least until a new long-term program is implemented by a DXD working group). In which case the changes to format are warranted but let’s confirm that short-to-medium term commitment to continue buybacks until an alternative is implemented.

I’d suggest the following points which to me seem like a moderate approach and compromise between DXD support and securing DAO needs:

  1. Not counting DXD repurchased (after reserve is depleted) as having been removed from the circulating supply means a death spiral is no longer an issue (as buybacks wont drive NAV increasingly higher). Also not counting vested DXD.
  2. Make a very conservative carve out for runway. Given the figure is adjustable (as runway can and likely will increase) and since it isn’t being suggested that assets outside of the carve out are out of reach of the contributor budget, the carve out should be for core operational costs only. i.e. Discretionary spending like travel stipends, e-sports sponsorships, grants etc. shouldn’t be included here, only operating expense for core teams.
  3. Commitment to continue the buyback, in this format, until the working group implements an alternative. 500k or 1m for this proposal, either is fine, provided there’s a clear commitment that absent an alternative from the working group a new proposal will be supported.

We need to be clear that DXD holders aren’t going to be left to hang once a proposal expires, or that the levers @Powers highlighted aren’t going to watered down with each subsequent proposal. That just undermines confidence among holders and cuts the legs out from under the market.

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I actually agree with most of what you have written here

To focus on this part – That will be the focus of my next posts, which I hope to clear time for soon :slight_smile:

Along the lines of

  • Quarterly worker / team contribution proposals with goals and KPIs (accountability)
  • Resource allocation to
    1. Governance – Gov 2.0, DXD token models and shipping the best on-chain governance products
    2. Protocol operations/ collateral – communications, bizdev, Dev management, auditing
  • Transition to an “spinout” DAO model, grow products internally and spin them out to independant entities which are still in the DXdao family (with DXdao accountability and contribution)
    This first attempt will happen with Nimi
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Hi all,

Adjusted several things in the above proposal text after lots of great feedback here on the forum, on the governance discussion and in Discord.

The text is updated but wanted to call out the adjustments:

  • Circulating market cap - defines DXD circulating supply as DXD that is “outside DXdao treasury or DXdao-owned contracts on Ethereum, Gnosis Chain, Arbitrum or any DXdao-sanctioned base”. This means DXD compensation will only count towards circulating supply when it vests, but all DXD through these buybacks would contract circulating supply. This would lower current circulating supply to 36,104
  • Treasury NAV (assets) - creates an adjustable NAV Contribution Percentage on “additional treasury assets outside of ETH, staked ETH, stablecoins and Swapr LP deposits” and assigns 25% for all of these assets. This affects the $$$ value the SWPR, ENS, GNO in the treasury contribute to the Treasury NAV
  • Adjustments to the spacing of the orders. Incorporated @0xSpicySoup feedback and text that was used from DXD Buyback #6 to allow for make up volume if orders are missed.
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Appreciate the follow up and definitely moving in the right direction.

However I still feel if we’re introducing a carve out from Treasury NAV for runway, then that runway needs to be core operating expenses only and not inclusive of discretionary spend like travel stipends, grants and sponsorships. Is that already the case with the 290k monthly burn rate or not?

If not and we use a much larger and inclusive runway figure, then DXD holders need to have a more direct say in these discretionary expenses going forward. Otherwise we’re setting up a situation which pits DXD holders against contributors which is counterproductive. e.g. DXD value dropping (via lower NAV calculation) because REP holders deciding to spend another $100k sponsoring e-sports teams, or approving significant grants to our own contributors.

Also not to keep harping on but also I’d still like to see the proposal text adjusted to include a firm commitment to buyback frequency and to signal intent to renew the proposal once finished unless an alternative has been implemented from the DXD working group.

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The $290k is inclusive of all costs. At this point, there is no categorization of ‘core operating expense’ and ‘discretionary spending’. You can see the breakdown of these in in the budget post from last month. This $290k number can change with whatever the current estimated burn is. Filing the last 1.5 months of expenses now, so will have an updated number soon.

Also, in terms of events/discretionary things, most of those costs have actually already occurred, because contributors have already requested stipends. For Colombia, DXdao has already paid out 50% of the expenses. And outside of Bogota, there are not any plans for any DXdao events for the next 6 months.

Regardless, the $290k number is not set in stone and should be adjusted as necessary. And, yes, i think it would be great to have DXD holders participate in the discretionary decision making. That’s why we do these expense reports and budgets so DXD (and REP) holders can give input on how the funds are spent.

Of course, we need a more formal governance mechanism to actually include DXD votes, which is absolutely critical for DXdao’s long-term health. But that is something being worked on in the short-term, and then of course unified governance in Gov 2.0

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Thanks @Powers

So 290k figure is inclusive. I understand those discretionary expenses (at least discretionary imo; travel expenses, grants and sponsorship) are mostly already incurred.

I’m not suggesting we cut them, but opposed to having them included in the carve out from NAV. Any new carve out introduced should be minimal, not maximal.

That and adding a commitment to buyback frequency and signaling continuation beyond this proposal until an alternative is implemented.


It’s important to be mindful of those 100%. As Chris mentioned once on a community call, the collective is digitally-native and remote-only, there are no office and office-adjacent expences associated with the DAO’s operations, which is a tremendous cost-save sparing the treasury throughout the years. On the other hand, marketing is something everyone would agree the community needs more of, and since we’ve always been reluctant to go down the web2 ad purchasing for promotion, a real organic way of networking and spreading the word about our developments has recently been discovered in the face of attending conferences, and not for the sake of attending, but with attempts of strategically leveraging those through talks, workshops, events, hackathon…
Nonetheless, certain initiatives that got funded in the past year probably wouldn’t have had the same chance if they were reviewed and voted on today, the mindset has certainly shifted moving forward, but it doesn’t mean that we should go down the path of cutting allowance when budgeting for following quarters. It won’t all be spent, and it will just roll over.


This proposal has been submitted and staked on mainnet, as well as a mirror proposal on Gnosis Chain. Once these are boosted, please go vote!

Note: the Treasury NAV calculations were updated in the text above before submission. There was also a slight adjustment because in a previous version the price of ETH was hardcoded. This has been updated.