Summary
This proposal introduces a shift from the current practice of burning FOX tokens to a more strategic use that aligns with long-term liquidity and ecosystem health. Instead of permanently removing FOX from circulation, this approach aims to leverage these assets to strengthen the market presence and functional utility of the FOX token within the DeFi landscape.
Abstract
-
Conservation of Value: Halts the permanent reduction of FOX tokens, retaining them for strategic utility and future ecosystem functionalities.
-
Enhanced Market Liquidity: Utilizes the FOX tokens to create FOX/ETH LP tokens, enhancing the overall liquidity on Uniswap, which supports healthier price discovery and market stability.
-
Transparency and Impact: Transforms the current burning mechanism into a transparent and impactful process that supports the FOX ecosystem by maintaining active participation in the liquidity pools.
-
Discontinuation of Direct Burns: Cease the current practice of burning FOX tokens.
-
Purchasing ETH: Use half of the funds earmarked for burning to buy ETH monthly.
-
Creating and Burning LP Tokens: Pair the purchased ETH with FOX to create FOX/ETH LP tokens and then burn these LP tokens. This method ensures the liquidity provided by these tokens remains in circulation, aiding in market depth and resilience.
-
Locked Liquidity Option: As an alternative, consider locking the FOX/ETH LP in a hedgy/Sablier stream directed to the treasury for a fixed term (12 or 18 months).
Specification
- Immediate Implementation: Upon approval, cease all FOX token burns scheduled for the subsequent month.
- Monthly Purchase and Pairing: Allocate half of the RUNE previously set to be burned to now be swapped into ETH and paire with FOX to create LP tokens at monthly intervals.
- Burning Protocol: Burn the created LP tokens, ensuring the process is transparent and reported within the DAO’s regular financial disclosures.
- Evaluation and Adjustment: Monitor the impact of this new mechanism on FOX’s market presence and liquidity, adjusting the strategy as necessary based on community feedback and market conditions.
Benefits
- Strengthened Liquidity: Provides ongoing liquidity, which is crucial for maintaining a healthy trading environment.
- Preservation of Ecosystem Health: Supports a robust ecosystem by maintaining utility and demand for FOX through active involvement in liquidity provisioning.
- Alignment with Strategic Goals: Aligns with the broader objectives of fostering a sustainable and resilient FOX ecosystem.
Drawbacks
- Operational Shifts: Requires adjustments in operational procedures and financial management within the DAO.
- Market Risks: Introduces new dynamics to the market which will require close monitoring and potential adjustments in strategy over time.
Vote
- burn FOX/ETH LP
- lock FOX/ETH LP 18mo
- nah, just keep burning FOX
