Rough draft to provide authorization to new methods for DXD buyback. Work is still being done to troubleshoot solvers on xDai, but these authorizations would ensure additional purchases in the event those efforts fail. There still needs to be additional testing and documentation in the coming days. The draft is meant to move the conversation forward while details are being ironed out.
The DXD Buyback Program was approved by REP holders in May, amended in June, and extended twice. Through the program, DXdao has purchased 5,281 DXD for 746 ETH for an average price of 0.145 ETH/DXD and a total USD amount at the time of purchase of just under $2m.
All of these purchases occurred through the GP Relayer contract, deployed on both mainnet and xDai. Gnosis Protocol deprecated support for Gnosis Protocol v1 beginning in July and Buybacks shifted entirely to xDai, relying on DXdao community to provide the supporting infrastructure to make GP v1 run.
That is becoming increasingly hard to do, but the community has also been working on other options to execute the buyback. This proposal would extend authorization to three additional methods to purchase DXD on the open market. These purchases would be governed by the same parameters approved in the original buyback signal proposal and the parameters update in June (unless otherwise stated below).
This proposal authorized the following four methods:
- Purchases through new Generic Relayer - this relies on a relayer contract similar to the GP relayer to place an order, using a relayer contract to facilitate the trade by calling an on-chain oracle at the time of execution. This relayer is able to interact with different protocols, but for the purposes of the buyback the, Aqua would be the DEX of choice. Important to note: Aqua and the Generic Relayer have not been audited. These uses would be experimental only and Aqua would not be open to the public until it is fully audited. This relayer would also be authorized to conduct DXD purchases through Swapr on xDai, Mainnet and Arbitrum.
- Purchases through Cowswap Integration - Cowswap is built on Gnosis Protocol v2 and is live on both Mainnet and xDai. It is a similar design to v1 but integrates with multiple liquidity sources. Until now, it requires a wallet signature, preventing DXdao from using it, but they have plans to enable smart contracts to use it. This authorizes DXD buyback orders to be placed through Cowswap on mainnet, xDai and Arbitrum should Cowswap launch there.
Member Balancer Purchases - Member Balancer is a program DXdao used to help diversify its treasury away from ETH. It relies on DXdao community members depositing funds into DXdao, submitting a proposal for a reimbursement and trusting the REP holders will pass the proposal.
- DXD repurchases through Member Balancer are limited by the same ADTV restrictions of the Buyback Program. The latest ADTV should be provided weekly to the #market-chatter channel on DXdao discord.
- Deposits must be made into aDXdao but reimbursement proposals can be made on xDai and Mainnet.
- Community members can request up to a 4% premium on the market price at the time of deposit, using the DXD/WETH price on Swapr on Arbitrum One. Reimbursement must be made in WETH.
- To qualify for the Member Balancer reimbursement, there must be no other Buyback Orders or Member Balancer deposits within 24 hours.
Risks and considerations
This proposal is a continuation of the Buyback program and maintains many of the risks outlined in the original signal proposal. There is also added risk through the authorization of a new purchase method that relies on smart contracts that have not been audited, namely the Generic Relayer and Aqua. Limiting usage to buybacks and the size of the buyback purchases lowers this risk, as well as returning the DXD to DXdao’s base, instead of storing it in the relayer. Users should be warned that interacting with these buyback methods come with risk.