TNS Buyback and Distribute Mechanism

TLDR;

• The 10% buyback and distribute has been implemented.
• TNS is planning to gradually increase the buyback rate to 100% within two years.

According to the first TNS governance poll on 24 December 2021 on using TNS domain registration fee to buyback $TNS and distribute to Governance stakers, the TNS team have finished implementation the poll on 4 January 2022.

Passed Buyback and Distribute Poll

Buyback and Distribute Mechanism

Here are the detailed explanation of the implementation:

1. After users buys a domain, the domain purchasing fee will be kept in the controller contract.
2. Bot is set to call a withdraw function in the controller contract at arbitrarily time once a week.
3. All $UST in the controller contract will be split to 90% and 10% and kept in multi-signature treasury contract and collector contract respectively.
4. Bot will then call a sweep function in the collector contract.
5. The collector contract will market buy $TNS from Terraswap UST-TNS pair using the fund in the contract.
6. All $TNS received will be sent over to the governance contract and distributed to stakers.

You can find the list of all related contract addresses at the end of this article.

Rationale for Buyback and Distribute

The domain registration fee is main source of revenue for Terra Name Service. The first governance poll of Terra Name Service introduces the mechanism for $TNS token to capture a segment of Terra Name Service’s performance.

By buying back tokens and distributing them to stakers, this creates buying pressure on $TNS and also allocate the dividends to participating governance members.

At the current implementation 10% of the domain registration fee is used to buyback $TNS tokens and distribute back to governance stakers. The remaining 90% is allocated to TNS treasury, which will be used for daily operation and expanding the team to speed up the development and partnership of TNS.

Our team initially set the buyback rate at 10% because we want to ensure that the team will have enough treasury to operate long term since we do not have any investors. However, we are planning to gradually increase the buyback rate to 100% within two years.

Closing thoughts

This is our first governance poll after taking the first step toward DAO! Thanks to all TNS holders who participated in the voting and for those who help creating and collaborating with us in this project. Please continue sharing feedback, vision, connection with partners, and cool ideas with us.

There are countless possibilities and importances for web3 domains as an on-chain identity for user’s wallets across multi-chain. Even suggested by the name, Terra Name Service is not limited solely to Terra chain. As the name our top level domain as .ust, TNS aims to be the domain name to use with any chains that support UST as we are seeing the adoption of UST across multiple chains. Terra, Cosmos, Osmosis, Secret Network, Crypto.com, Persistence, Injective, Solana, you named it, we will expand the support of TNS to the chain.

We strongly believed that our integration roadmap, potential partners and engaging community will result in massive cross-chain adoption which creates a positive feedback loop bringing value for $TNS token stakers.

Contract 📄

Controller: https://finder.terra.money/mainnet/address/terra1jfk9saed6c4n40qwe54mcxmgs8kz4husly3jx4

Multisig Treasury: https://finder.terra.money/mainnet/address/terra1rtxau4as3e05gkffjxysdzr3l4mwd39r35sjnc

Collector: https://finder.terra.money/mainnet/address/terra18lhpvps8hay8mtt3vd0cptukzhmlvpssq79h5r

Gov: https://finder.terra.money/mainnet/address/terra1a5thpf2gdrrneewjkutyz5q6zr2kn8ymg0cxn9

First buyback:
https://finder.terra.money/mainnet/tx/4310EAD13AD3F2AAE58603E767D3E7A3E4ADCC2F863E9A30C180A58F675F9DE4