[DIP] Derive DAO increase revenue allocation for weekly buybacks

DIP
1

# Simple Summary

This proposal seeks to increase the weekly revenue allocation for $DRV token buybacks from 25% to 80%.

# Abstract

The objective of this proposal is to authorize the buyback and accumulation of $DRV tokens from the open market. This initiative aims to establish a fair market price for $DRV tokens and safeguard the Derive protocol against potential hostile takeovers exploiting undervaluation.

Reference: [DIP] DRV Token Launch and Functionality
(25% of protocol revenue will be used for token buy-backs for the DAO treasury.)

# Motivation

Over recent months, Derive has successfully completed its rebranding from Lyra and launched a robust suite of technologies designed to compete with centralized exchanges (CEXs). While the focus has been on developing innovative products, the value and market capitalization of the $DRV token have been secondary priorities. Due to recent market conditions, the token’s price has experienced a downward trend, which does not accurately reflect the protocol’s technological advancements or ecosystem growth.

# Specification

  • The DAO will allocate 80% of weekly protocol revenue to purchase $DRV tokens from the open market.

# Rationale

Increasing the allocation for token buybacks will strengthen the DAO’s token reserves, support a more accurate valuation of the $DRV token, and enhance protection against unsolicited takeovers, thereby ensuring the long-term stability and integrity of the Derive protocol.

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Could also provide a % to increase token liquidity too

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For token liquidity rewards, the team is allowed to set what they consider. No need voting proposal.

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I’m not referring to incentives. I believe it’s more solid if the protocol itself OWNS a certain amount of the liquidity. For example using a certain percentage of revenue to purchase eth to load with the purchased drv. I (not officially) made this comment back when eth was below 2k. Meaning the protocol and or drv token would’ve had gains from eth exposure too

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