DXD Buyback Extension #3 [Draft]

Below is draft text for a $1m extension of the buyback program. Some data on the buyback program in the next comment. Open for comments on things to add/subtract. Updated with DXvote links instead of Alchemy :slight_smile:


The DXD Buyback Program was passed by REP holders in May of this year. Since then, 6,313 DXD have been purchased on mainnet and xDai for an average price of 0.152 ETH/DXD. Using the USD price at the time of purchase, $2.7m of DXD has been purchased. This is just over 10% of the DXD circulating supply.

The buyback program was updated in June to increase the slippage tolerance of trades as well as clarify the accounting measures. The buyback program was then extended for another $1m in August and then another $1m in September. The total amount of DXD purchased is quickly approaching the limit placed on it by the previous proposal and soft community consensus has demonstrated support for another $1m extension.

Accounting for the 6,313 DXD purchased and the 920 DXD that has been issued to contributors in vested contracts (461.4) and to LPs for Swapr farming rewards (458.6), the outstanding DXD supply (43,583) represents a market cap of $30m - still comfortably below the $64.5m in ETH and stables in the DXdao treasury and the $10m in the buyback reserve. The buyback program is intended to address this discrepancy and acquire an undervalued asset.

The proposed DXD token model that has been embraced by the community intends to upgrade the DXD bonding curve and shift to a different buyback method for DXD. While the community moves toward a new model, the methods outlined in the DXD Buyback Program and purchases through the GP Relayer on xDai and Mainnet enable DXdao to drive value to DXD holders now. There has also been discussion in the community about shifting the buyback program to Aqua or another relayer that could interact directly with Swapr.


This proposal extends the DXD Buyback Program for another $1m to $4m total under the same conditions outlined in the original Buyback Program signal proposal, the parameter update and the first extension and second extension.

These and other DXD purchases through the Buyback Program have contributed to the community’s intention to use the buyback reserve to purchase DXD. ETH from DXdao’s general treasury can be used in lieu of the buyback reserve until the DXD token contract is upgraded and that ETH is recovered. In total, the buyback reserve has 2,499 ETH and so far, 958 ETH has been used to purchase 6,313 DXD through the buyback program.

Risks and considerations

The program will take place on xDai, a sidechain with less security properties than Ethereum. The Buyback Program has been running for four months with few problems; the GP Relayer has worked to complete the purchases at the market price. There is a concern that Gnosis Protocol v1 on xDai will have limited support, but DXdao community members are striving to maintain the network of solvers. The community is also exploring additional options

DXdao has already spent almost $2.6m repurchasing DXD. This has increased the price of DXD relative to ETH but it still falls below the book value of ETH in the treasury.


some additional notes:

See the Buyback Google Sheet and the trading volume excel for underlying data

You can see that several of the proposals were executed on the same day because there was a backlog due to problems with the GP relayer. There were also a buyback order on October 12 that looked like it had been manipulated. Someone drove up the price of WETH/DXD pair on Swapr right before the Oracle checked, so the order was placed significantly above market price. SWPR xDai farming has alleviated some of this concern as the WETH/DXD pool is much larger.
Over the last 10 days, orders have been placed at a very similar price (0.175) because there is a large sell order on Mesa. It was 1300 DXD but is now down to a 290 DXD sell on the orderbook.

Trading volume over last 5 months

And more specific numbers:
Screen Shot 2021-10-26 at 4.45.15 PM


This signal proposal has been submitted and is now boosted on xDai and Mainnet.

xDai - voting open until 14:30 on Friday, November 5th.

mainnet - voting open until November 7th, 13:00 UTC:

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