Continue the LQ token buyback program

Temperature Check
1

Continue the LQ token buyback program

Proposal Summary

This proposal aims to continue the LQ token buyback currently in place, where the current protocol revenues allocated to the DAO treasury are used exclusively for LQ token buybacks.

This original implementation was voted earlier this year in proposal #79.

The LQ buybacks follow a Dollar-Cost Averaging (DCA) approach, utilizing the total interest repaid, loan origination fees, and Catalyst voting rewards generated in the previous month for the Liqwid DAO treasury.

The purchased LQ will be added as collateral to the Core Team Financing Loan, improving the position’s health factor until the loan is fully repaid or used to pay for the LQ staking rewards.

Proposal Reasoning

Since its implementation in September, along with various initiatives to reduce sell pressure—such as OTC buybacks and reduced market incentives—the price of LQ has experienced significant growth.

The LQ buyback program has proven its value by benefiting all LQ holders while simultaneously increasing protocol-owned liquidity (POL) collaterals and attracting new LQ holders.

Specifications

If this proposal is approved, LQ buybacks will continue immediately for a period of 12 months (1.1.2025 to 31.12.2025), unless stopped or modified through a subsequent vote.

The programmatic distribution will continue to be carried out in LQ tokens, as is currently the case.

Conclusion

Do you support this proposal to continue the LQ token buyback program?

  • Yes, I support this proposal.
  • No, I do not support this proposal.
0 voters
1 Like
2

First and most importantly, I am pro buybacks. However, as this Temp Check is written and proposed, I am not in favor.

Additional oversight of this needs to be shared, notably in a quarterly review of the buyback program, which is standard in many aspects of finance and stocks, after a quarter has been completed.

Stating the Spent ADA and the average price LQ was acquired at will allow transparency to see how effective the buyback is and derive more outcomes.

Front running from historical information is not a risk. Announcing that ‘X’ amount of ADA was used by ‘X’ amount of LQ at an average price of $X.xx or average ADA price during the past 3 months is not a risk. And that ‘X’ amount was applied as collateral to POL loans, increasing HF from ‘X’ to ‘X’ is also not risky. These numbers are healthy fiduciary responsibilities that all LQ stakeholders should have.

Why this is also needed, taking a look at the proposal from #79, “The purchased LQ will be added as collateral to the Core Team Financing Loan, improving the position’s health factor until the loan is fully repaid.” however, when comparing the Discord announcement the POL collateral and loan amounts from Discord to current loan information for POL. the LQ collateral has not changed.

What I am not proposing, is detailing the DCA and the time and date of it. Just simply a recap of how it went over 3 months.

Changing to a Quarterly report recap would change my vote to a Yes.

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