SCP-223: Change the rFOX 5% Burn to a 5% FOX Buyback
Summary
Stop burning the rFOX 5% and instead buy FOX with it instead. Same 5% of revenue, same monthly cadence, same market impact on the buy side. The only difference is that the FOX ends up in the treasury as an asset instead of at a burn address.
Abstract
Every month, when the rFOX revenue share runs, 5% of revenue goes toward FOX that gets burned. This proposal changes how that portion of the revs is used. At the same point in the monthly rFOX distribution cycle, we swap into FOX on the open market using ETH or another low slippage asset, and keep that FOX to go towards ongoing expenses and for DAO contribituros. Nothing changes for rFOX stakers, and nothing changes about how much revenue is set aside.
Motivation
The DFC is watching runway closely, and 5% a month adds up faster than it sounds. At 2026 average revenue, holding that 5% of revenue in FOX covers almost an extra month of expense and runway over the next 18 months. That’s a meaningful number for a DAO in austerity. We are trimming workstream budgets and scrutinizing every line item, this will add up over time.
Specification
When the monthly rFOX revenue share executes, the 5% currently allocated to the burn is instead used to buy FOX on the open market.
Funding asset: ETH or another low slippage asset already held from revenue
Execution: TWAP when the month’s revenue supports it, otherwise the lowest slippage swap option available through the platform
Destination: Ethereum Shapeshift Treasury: 0x90A48D5CF7343B08dA12E067680B4C6dbfE551
Cadence: monthly, alongside the existing rFOX revenue share actions
No change to the rFOX reward rate, the revenue share percentage, or the staker experience. This only redirects the 5% that currently goes to the burn address.
Benefits
• Keep an extra 5% of the revenue generated each month
• Additional volume and buy pressure each month.
• Small win for FOX LPs. Predictable, recurring buy volume they can count on.
• Treasury flexibility. FOX in the treasury can be used later. FOX at a burn address cannot.
Drawbacks
• FOX is no longer deflationary.
• The Volume could get gamified. Using a TWAP and varying execution helps, but it doesn’t eliminate the risk.
• Optics. Buybacks that sit in the treasury are a weaker headline than burns, even when they’re
better for the balance sheet.
Vote
For: Change the rFOX FOX burn to a FOX buyback.
Against: Do not change the rFOX FOX burn.
For with changes: Please comment.