[DIP] Burn Policy for Existing and Future $DRV Buybacks

DIP
1

Simple Summary

Burn all $DRV previously acquired through buybacks, and require that all future buybacks are burned immediately upon purchase.

Abstract

This proposal authorizes a one-time burn of all $DRV that came from prior buybacks, and requires all future buybacks to be burned as soon as they are executed. The goal is to reduce supply, increase token scarcity, and keep the policy simple.

Motivation

Derive is focused on building a strong trading ecosystem. A clear burn policy for buybacks makes $DRV more scarce and easier to understand for the community.

Specification

  1. One-time burn of existing buybacks
    Send all $DRV from past buybacks to a verifiable burn address so they are removed from circulation forever. Publish a simple summary with totals and transaction links.

  2. Future buybacks are burned immediately
    Any $DRV purchased through buybacks is sent to the burn address right away, with no treasury holding period.

  3. No change to revenue allocation
    This proposal does not change how much revenue is used for buybacks. If that percentage changes in the future, the burn policy still applies.

Rationale

Burning buybacks permanently reduces supply and makes $DRV more scarce. It is simple to follow, easy to verify, and keeps the focus on long term value.

1 Like
2

Thank you for your proposal.

I recognize the need for a token sink mechanism, but implementing a burn seems premature at this stage. The current buyback program mostly offsets token emissions from trading rewards and staking.

A direct burn would allocate 25% of revenue to token reduction while we continue issuing 500,000 $DRV tokens weekly. I would be more supportive of a burn mechanism once the protocol achieves sustainable revenue, such as an annual benchmark of $5 million.

1 Like