Economic floor and buyback mechanism

Hi guys, I just want to make a suggestion. Once I have responses and some debate, I’ll gauge whether or not to formalise this into a PIP proposal.

At the moment, token price is a concern for many, largely because of sell pressure (especially from pre-copper launch folks). The market and investors want some sign of reversal. Locked staking will help to a large extent, but the daily release schedule may continue to apply some downward pressure. (In my view, once locked rewards are in place, staking rewards will gradually outpace the current tokenomic depreciation, so the price will start to recover without intervention anyway!).

One way to help support token price is a buyback and burn of tokens. However, the DAO needs to use the treasury to invest in alpha, and so a buyback right now would be absurd.

Nonetheless, purely as a signal of confidence to the market, I’d like to suggest a partial buyback and burn of tokens (only partial, so buyback formula to be discussed!) if the price were to drop below 1.7 cents after 1st January 2023.

The rationale for 1.7 cents is that the current treasury value is $17m, and the max tokens are 1 billion, so if the treasury sees no growth (which would be absurdly unlikely over time) and all tokens were to be hypothetically dumped into circulation (which also doesn’t happen immediately), the net asset value per token would be 1.7 cents. Hence, a partial buyback support at 1.7 cents basically signals to the market that the DAO is prepared to support the token price at par if after 12 months no alpha has been delivered and no price recovery has happened. Note that I don’t want this to trigger prematurely, hence the 12 month delay period.

This proposal therefore sets a contractual floor of 1.7 cents to sit alongside the current long-term economic floor. This will send a big positive signal to the market too about confidence in the DAO and in PATH, which in itself should almost definitely mean that the price doesn’t fall to the trigger level. Combined with the locked staking, I’d imagine that this would turn the price action around within a matter of months without any intervention actually needing to be applied.

Thoughts would be much appreciated before turning this into a formal proposal. Thanks in advance.

4 Likes

Sorry. But stop that circus. Keep your Mind clear and start to be honest here. Path marke tiny and not have any sell pressure from stakers side. Coz amount of tokens in stake are grow till last PiP was apply by “DAO”. All around clear understand that tactic chosen by the team are not so sucessful. And they continue to kill PATH. Since start. Charts never lie, look on it.


So no need to continue telling ppl fairy tales about helpful staking rewards locking that push back path price on x10 level.
Better start to think about machinisms and actions that would be really helpful.
You are calculated according to full emission. But treasury net value you are get actual. Lol school tricks detected.
Calculate net value at right form. For now actual net asset value per token PATH how much?
Let’s start. 17 millions in treasury, 50 millions PATH in circulation. So actual net asset value per one PATH token = 0.34$
Look on market now. Actual real price : 0.06$.
For now explain me. Why actual rate are not confirmed? You are cannot hold actual net asset value per token since start of PATH markets. Drop it to hell. And now you are try to construct proporsal that based on specifications that looks like a dream lol. Target value :1.7 cent. Emission: 1 billion. You are already in few steps for touch your target price floor with emission that 20 times lower than in your calculation. Where is a real seed in your propose?

And looks like you not know how trading and market making works. No needs to sold out 1 billion tokens to drop path price on 1 shiboshi level. Trader can simple dumping market via circle action with 25% of emission. Without support on buy side any amount of path on sell side drop market to hell. You are hold 17millions in stablecoin and not support your PaTH market. It’s a main signal to all around to follow your tactic and go to any other active and perspective market for trade and invest.

Thanks crypt0.

Make sense to have a treasury buyback scheme as a confidence signal to the market.

Initial thoughts, we are looking at 40% tokens in circulation after year 1. Might be possible to even set a more aggressive buyback rather than looking at FDV? Like a 3.4 cents hard floor after year 1.

2 Likes

Overall good proposal and as ethermage stated, the figures can be calibrated accordingly to circulating tokens for a more aggressive stance. On the conservative side of the spectrum, could also separate out the liquid(unlocked) components of the treasury for this purpose instead of using the entire treasury as market wide movements could impact the treasury value quite drastically. This will also help in preventing some of the manipulation or front running issues that we may encounter with this.

One other note would be that I imagine that it would take more factors than just this to actually turn price action around. Locked staking will help reduce some of the inflationary aspects of the token but it’s still inflationary in essence. The price floor will help in the deflationary aspect but the main bulk of everything will still come from the operational side and public sentiment.

1 Like

Yeah i think the suggestion was to improve sentiment and give new investors confidence.
Some DAOs are implementing various types of buyback mechanisms for this reason.

And I do agree that the key value driver is the team delivering on the treasury growth and ecosystem growth. And the ability to communicate these out.

2 Likes

Thanks @Ethermage and everyone for the input. As you mentioned, this is all a construct for market sentiment and confidence rather than necessarily actually being required. I don’t actually believe the token price will ever fall below 3 or 4 cents :slight_smile:

Sharapofff, I understand your pain and frustrations at the current price action, but have faith, this project will comfortably pull through with something to spare. I don’t fully understand your line of argument though - there are solid economic fundamentals behind the proposal, and with locked staking the sell pressure has indeed reduced (as demonstrated by the current price stabilisation over the last few days). Also, just to note, I am not a team member, just a supporter, investor, well-wisher, and one day friend.

To summarise though, I expect there to be a little bit of price volatility once the CEX has listed. It therefore makes sense to wait for a week or two until this has settled down, and then revisit this and other similar market-signalling proposals. Let me know if anyone disagrees with this suggestion.

Concurrent measures must be taken there are many doors requiring several keys
Buybacks
Marketing
Community trust
Transparency

Hey dude. I really dont think buybacks make any sense to do unless you plan to sell them for a profit at a later stage to increase the treasury. Add real utility to the token for long term benefits.