Proposal
We propose that SiloDAO offers to buy back up to 30M $SILO from any interested seller at the rate of $0.02 per $SILO. The DAO will need $600,000 to finance the buyback. Instead of using USDC, the DAO can pay sellers in its holdings of CVX to finance the buyback.
Any token holder can participate in the buyback with the following terms:
- DAO pays $0.02 per $SILO.
- DAO authorizes the use of 100,000 CVX - that is $6 per CVX calculated as a 7-day average.
- The DAO authorizes the core team to conduct the operation transparently.
- Buyback continues until 30M $SILO is bought back.
- Buyback can be ceased at any point by a governance vote.
- Bought $SILO are sent to the DAO’s treasury.
- Buy back can be executed via AirSwap.
Rationale
Given illiquidity of $SILO, large token holders are unable to exit their positions without significant price impact. Of note, there is a single wallet that at one point owned ~30% of Silo’s current circulating supply that has constantly been selling over extended periods time. Due to how little liquidity $SILO has, it is difficult to gauge how long this process will take for them to fully close their position.
We propose that SiloDAO offers a buyback scheme within predetermined parameters. This will allow token holders to exit the entirety of their positions OTC if they desire rather than constantly selling.
Benefits
- Removes constant sell pressure allowing trading to occur organically.
- Minimizes uncertainty for holders that wish to LP.
Drawbacks
- Exchange highly liquid token ($CVX) for illiquid token ($SILO)
- Loss of cash flows from bribes (approximately $12,500 a month)
Next steps
A snapshot vote will be created shortly. If the vote passes, the core team will publish a detailed guide on how you can participate in the buyback.
