Discussion regarding Buyback

Hello (theRFnoob here),

I have been a bit busy with work recently, and couldn’t participate much to the discussion. I have however watched the youtube videos. In particular: DXgov Weekly Gathering [2021-05-26] - YouTube

Thanks for discussing the technical aspects in details and in an open fashion (as usual)!

The technical procedure (based on Gnosis and MESA) chosen for performing the buyback is possibly the best, technically, but it’s also quite complex and looks (after the first few weeks) a bit slow.

Let me make the following proposal for a topic to be discussed in one of the next few calls (if you have time):

Proposal for discussion: what about setting some concrete goals for the buyback procedure, so that we can evaluate (“scientifically”) if the procedure is going well or not after a certain time?

Example of goals might be:

  1. We expect to buy at least K DXD from the market by end of June.
  2. We expect to raise the price of DXD to >0.15eth by the end of July,
  3. We expect to see a growing curve of volume, etc etc.

I am confident that the buyback procedure (which now is at its very early steps) will go well. However I think we should avoid pushing too much effort on a specific solution (Gnosis) if this proves after a certain time to be (for whatever reasons) not effective.

ADDITIONAL REMARK: I just saw that the xDAI proposal for the 5th buyback:

has received just one vote (beside mine). That doesn’t look very good. Could the governance calls deliver the message that voting should be felt both as a ‘right’ but also as a ‘duty’ for REP holders (the more REP you have, the more you should feel compelled to vote)?

3 Likes

I agree on your point made about votes from REP holders.

However, in terms of goals I’m not sure if it’s worth quantifying. An example is that if we buy back a lot of DXD by the end of June/July, that probably means that the price of DXDETH is still low at the same time. Whereas if we haven’t bought back a lot of DXD by then, then the price of DXDETH is high - so those 2 goals are kind of contradictory in nature.

In saying that though, in both situations the buyback is a success because if we have bought back more DXD at a low DXDETH price, then the DAO has accrued more value and if the DXDETH price is higher then that is also a success since it is now being priced more fairly.

2 Likes

I don’t entirely agree.
While obviously the buyback is not bad (for DXD holders), this doesn’t not imply that it is actually good.

Just as an example: today, the price of DXD is 0.096 ETH. This is lower (if I remember correctly) than when the buyback program started. If this value is not increase over time, then we can conclude that:

  1. the buyback program has bought some DXD as good prices, which is good for DXdao,
  2. but the program has also not achieved its n1 goal of bringing DXD up to book value.

So again, I think (IMHO) we should set a clear goal:

bring DXD up to book value.

If this outcome is not achieved (in a progressive and measurable fashion) the buyback program might have been worthwhile to some extent, but still unsatisfactory as a whole.