What Should DAO Do with Buybacked Governance Tokens?

DAO Proposals
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21

A dynamic hybrid model should be the way to go, no?

For example, starting with a high percentage burn rate like 90% and reducing it the more get burned until a decided amount of WRT remains and the burn is reduced to like 10% or whatever (just some numbers to get the idea across).

At the same time, the amount to use in incentives would get higher in percentage, a little lower most likely in hard numbers (as the amount of WRT would start to shrink, given the burn).

I would not go without buybacks for incentives, as to be able to incentivize the one thing a DEX needs to survive the long run - liquidity – should be considered important (given the goal is a lasting product and not a token value cashout). As the amount of incentive is already locked to holding WRT in vaults, a buyback would be like a week burn in a way.

Also, I do not see a problem with people selling their rewards, as it would be roughly a net zero effect on the token price and no “dump”. So WRT holders have two ways to “profit” from wingriders.

  1. liquidity provision + holding WRT in vaults = profit with extra fee sharing (would be the same effect, if instead of buybacks, the liquidity providers would get a highter fee percentage, but the WRT vault seems cooler)

  2. The burn would reward long-term holders and incentivize liquidity providers to not instantly “dump” their rewards, as they would theoretically (as long as the DEX works) get more and more valuable.

So, this would be the way I would tackle it. Also, as mentioned, the Firstriders need to have WRT to get, which would only be possible if the hard numbers would not go below a treshold - hence a high burn rate at the start and a low one at the end near the minimal decided WRT amount everyone would be happy about. Also, the burn would make firstriders more and more valueable over time, which would be nice for its holders - but we could also use a solution, in which the ada amount a firstrider would get would be reduced by the same percentage the burn had happened. This would solve the firstrider wrt amount in a “fair” way, but Im not a fan of it, as we have other options (just wanted to point this solution out).

Just my two cents late at night :slight_smile:

Tldr.: Hybrid with high burn rate start, lowering over the time until a predetermined new max WRT amount. The rest goes into buybacks for farming, vault (prefer higher vaults for WRT lockup) and other potential stuff.

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22

Im against a different reduction rate of firstriders income. If the amount is reduced (which could be discussed), every tier should be reduced by the same percentage (imo).

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23

I agree with the essence of krebsmenschen’s proposal. I share that essence 100%. A hybrid model of burn and system maintenance, keeping the farming system and the vault, to help attract liquidity while maintaining the percentage received by firstriders, albeit reducing their benefits by the same percentage at which a burn occurs.

As a variant, I would like to introduce the idea of first setting aside a reserve to incentivize liquidity (for example, 10% or 8%), and then carrying out a 100% burn of whatever accumulates in excess in the treasury.

We have to take into account that if USDCx TVL and native Bitcoin TVL enter Wingriders DEX, then, through fees, WRT would go to the moon relative to its current price, and that is the key to attracting all liquidity. In other words, WRT would finally be truly fulfilling its mission. If we manage to get WRT into a virtuous cycle of price appreciation, we’ve won the game.

I also wouldn’t be opposed to considering a 1 or 2 year lock up on the WRT received from the FT Firstriders, which would be deposited separately in the vault, in the sense that it would not be received as WRT tokens, but would instead be forcibly sold through some mechanism enabled for this purpose via one of the farming pairs, with those LPs (for example, NIGHT/ADA) being locked for 1 or 2 years. These would be measures that would increase the DEX’s TVL.

I’m still listening to your opinions.

24

Burning coins don’t generate value and incentivizing pools with a coin that doesn’t governs much isn’t attractive.

Lets build a dao liquidity and generate more yield, then we will have much more to talk.

Stop the buybacks and build ada/night/etc liquidity with it and burn the rewards from those farms.

Later on we could enable through automation the ability to burn wrt in exchange of a ratio of the liquidity, that would give intrinsic value to the token + perenity of the dao.