Extend DXD Buyback Program for another $1m [Draft Proposal]

Below is draft text for a $1m extension of the buyback program. Some discussion points in the next reply. This will be a topic on Wednesday’s governance discussion.


The DXD Buyback Program was passed by REP holders in May of this year. Since then, 5,230 DXD have been purchased on mainnet and xDai for an average price of 0.144 ETH/DXD. Using the USD price at the time of purchase, $1.9m 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. 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 5,230 DXD repurchased, the outstanding DXD represents a market cap of $24.1m - still comfortably below the $46m in ETH in the DXdao treasury and the $8m 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.


This proposal extends the DXD Buyback Program for another $1m to $3m total under the same conditions outlined in the original Buyback Program signal proposal, the parameter update and the first extension. This proposal further stipulates that DXD or xDXD in the GP Relayer does not contribute to the count of DXD circulating supply.

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, 756 ETH has been used to purchase the 5,230 DXD purchased 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.

DXdao has already spent almost $2m 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 items to discuss:

  • This proposal text extends the program and also explicitly states that the previous purchases should be counted towards the use of the buyback reserve to purchase DXD. This would further signal DXdao’s intention to purchase DXD and pave the way for a new DXD token model. Feedback on the language? It could be more/less explicit.
  • This proposal does not alter the buyback size limit to 25% of Average Daily Trading Volume. We did compile additional on-chain data - specifically 1inch limit orders - which provides a small boost to the daily volume. Changing the 25% is open to discussion but not clear how much increasing the % would make a difference vs. increasing the daily volume
  • We could extend it for more than $1m? The last extension passed on August 2, so an additional $2m might reduce some governance overhead. On the other hand, the $$$ limit presents an opportunity to adjust or clarify the program.
  • We should start to think about (not in this proposal):
    • Further defining the ‘book value of the treasury’. SWPR token? What about xDai base and Swapr LP tokens?
    • Automated the purchases under certain conditions. A bit heavier lift, but is there a way to automate the buyback mechanism. Perhaps this could come when the token contract is upgraded, but it would be good to start thinking of the conditions the spur a DXD buyback (product revenue, as well as the value of the treasury)

This has been submitted and boosted on xDai:

and Mainnet: