The DXD Buyback program recently entered a new phase. Over the last 15 months, the funds used to purchase DXD came from the Buyback Reserve, but this was recently depleted; 2499 ETH was used to purchase 11,536 DXD.
In August, DXdao passed a new buyback proposal with new parameters for using funds from the general treasury. These orders began after the buyback reserve was depleted and have all occurred through Cowswap. Given the different parameters/structure, I created a new spreadsheet to track these orders. Right now, the DXD NAV Ratio (subtracting the runway) is 62% (purchases are authorized up to 70%). I should also note that purchase sizes have been smaller because they are market orders so they are more susceptible to slippage. The important thing is that the order sizes have not bumped up against the ADTV limit. There is still some room to go.
So far these orders have only taken place on Gnosis Chain. I want to propose two changes/additions/alterations.
- Submit proposals on mainnet through Multical3 scheme (takes 16 days)
- Use stablecoins are purchasing currency, instead of ETH
The most recent buyback proposal that authorized $500k in purchases:
This proposal authorizes up to $500,000 of DXD to be purchased from the general treasury as long as the DXD NAV Ratio, which is the DXD Circulating Market Cap divided by DXdao Treasury NAV, is under 70%.
The proposal does not stipulate that ETH must be used, nor does it restrict the chain of operation. The reason to use stablecoins instead of ETH is because the price of ETH has dropped so low in light of recent events, plus the treasury is a mix of ETH & stablecoins, but only ETH has been used on buyback purchases.
The same slippage concerns on Gnosis Chain are also on mainnet, so order sizes would need to be small-ish (< $5k), and it would be tricky because the $$ price submitted could be greatly affected by a volatile ETH price (across 16 days…), whereas when doing buybacks with ETH, we’re only concerned with DXD/ETH price. I think these risks can be managed and monitored. I don’t think this should change activity on Gnosis Chain using ETH. The two combined would help reach higher amounts that are restricted bc of the slippage.
Based on the earlier proposal text, I don’t think there needs to be any additional approvals but wanted to open the conversation here. Hoping to get a first proposal submitted before the end of the week (since they take so long!)