DXD Buyback Extension #4 (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.


The DXD Buyback Program was passed by REP holders in May of this year. Since then, 7379.07 DXD have been purchased on mainnet and xDai for an average price of 0.154 ETH/DXD. Using the USD price at the time of purchase, $3.7m of DXD has been purchased. This is just over 15% 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, then another $1m in September and again in October for $1m. 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 7,379 DXD purchased and the 461 DXD that has been issued to contributors in vested contracts, the 458 DXD that has been issued to LPs for Swapr farming and the 1908 DXD in unissued DXD compensation (461.4) and to LPs for Swapr farming rewards (458.6), the outstanding DXD supply (45,145 DXD) represents a market cap of $38m - still comfortably below the $69.5m in ETH and stables in the DXdao treasury and the $11m in the buyback reserve. The buyback program is intended to address this discrepancy and acquire an undervalued asset.

As the DXD Buyback Program passes 7,000 DXD acquired, the Gov Ops squad has been looking for ways to streamline the process. This extension features two key changes. First, the mainnet signal proposal is also sending the funds necessary to complete the buyback, and as with the previous transfer, these are being sent directly to the GP relayer on xDai. Second, unlike previous proposals this proposal suggests the extension be done in an ETH amount, equivalent to the price of $1m at the time of writing this proposal. Hence, 215 ETH. Using ETH rather than USD in this extension allows for easier monitoring and execution of the buyback as the exact amount can simply be deposited into the GPv1 relayer on xDai. Tracking also becomes much easier as one has to simply check the funds in the GPv1 relayer.


This proposal extends the DXD Buyback Program for another $1m to $5m total under the same conditions outlined in the original Buyback Program signal proposal, the parameter update and the first extension, second extension and the third extension.

This proposal also sends 215 ETH to the ETHrelayer contract, identified as, 0xb9C11a239CEb03626b439dDeD95AC51ffe000795, which will relay the ETH to the dev multi-sig address, previously identified as 0x5f239a6671bc6d2baef6d7cd892296e678810882 whose signatories have been verified as REP holders, which will convert it to WETH and bridge it over to be deposited into the GPv1 relayer on xDai.

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, 1142 ETH has been used to purchase 7,379 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 over $3.7m 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.

Full execution of this proposal relies on the Dev multi-sig, which has already bridged and transferred millions of dollars of assets to xDai.