It has been 3 months since the last buyback report, which means it is time for a new burn! If you are interested in the mechanics and logic behind the buyback, I encourage you to read the blog linked below.
Updated buyback token economics: Introducing continuous buybacks
On March 27, GET Protocol conducted its largest buyback to date. In this blog, I will review how the Q1 ’19 buyback…
Don’t trust, verify!
If you want to verify the state change count for yourself, I encourage you to run the numbers for yourself with the simple script available on the GET Protocol Github. The following command will import all IPFS batches between 28th of December and 27th of March:
python import_IPFS.py --startheight 11539000 --stopheight 12120640output: 216163 statechanges
Integrators of the GET Protocol(ticketing companies) are required to use GET as fuel in order to use the features. This…
Summary Q1 statechanges
The GET Protocol processed a total of 216 163 state changes in Q1 of 2021.
41 926 tickets & up sells have been issued and 122 tickets have been resold for a total of 251 events.
To fuel these state changes a total of 7336 GET has been burned. Worth $57 220 at the moment of burn, $26 801 at the moment of purchase from Uniswap.
Proof of burn Q1: Etherscan tx
Previous burns (new economics)
Q2 2019 -> 44 468 tickets sold |20 839($7 627) GET burned (etherscan)
Q3 2019 -> 20 592 tickets sold | 12 293($3 834) GET burned (etherscan)
Q4 2019 -> 62 215 tickets sold | 98 348 ($31 997) GET burned (etherscan)
Q1 2020 -> 81 061 tickets sold | 107 059($25 997) GET burned (etherscan)
Q2 2020 -> 48 090 tickets/upsells sold | 60 607($12 317) GET burned (etherscan)
Q3 2020 -> 53 197 tickets/upsells sold | 52 893 ($12 317) GET burned (etherscan)
Q4 2020 -> 53 841 tickets/upsells sold | 58 824($20 104) GET burned (etherscan)
Q1 2021 -> 41 926 tickets/upsells sold | 7336 ($26 801) GET burned (etherscan). At the moment of burn $57 440.
Basic Burn Calculations Q1:
Total state changes: 216 163
Target rate per state change: €0.102
Eur amount used for buybacks: €22 521 (est)
Total GET acquired from open market in Q1: 7336 GET
Calculation burn exchange buyback
Total funds for buyback Q1 (41 926 tickets/upsells) = +-€22 521(est)
Amount GET bought from open market = 7 336 GET
Average buyback price of GET for Q1: +-€3.06 (est)
Undiscounted GET required = 7 336 GET
Discount to be provided = 0 GET (worth €0)
Total GET burned = 7 336 GET
Total value of burn = €48 268 or $57 440
Burn details — Sourcing of GET
Total GET bought back: 7336 GET worth €48 268 or $57 440 at the time of burning. All the GET for the Q1 Buyback has been acquired directly from Uniswap in 3 transactions:
New token utility avenues
The increased open market liquidity for GET that has developed over the last couple of months is opening up an array of exciting utility enhancing features. For example the usage of GET as a staking or ‘skin in the game’ vehicle for ticketing companies and underwriters of event financing DeFI loans. As well as being the vehicle of investment in said events. Even though we are still in early stages for these token applications, it is worth to note that a higher asset valuation (and better liquidity) isn’t a damper on its utility and/or significance in the protocol. On the contrary the liquidity and valuation allow us to add token utilities previously unpractical due to lack of liquidity. The community can expect concrete information on this shortly.
DAO — GET token economic policy
As announced in the monthly update blog, the foundation is taking large steps to decentralize the protocol and move governance control to the token holders. This will be a prolonged proces involving a lot of iteration and experimentation. For governance by token holders to be effective it is key that the incentives of the token holders(market), the producers(ticketeers) and the users(fans) are aligned. The diagram below provides an overview on how these actors interact in the buyback & make model.
Designing for effective governance
The simplicity and effectiveness of the buyback & burn model has proven to be very effective for the GET Protocol over the last couple of years. Even though the model remains just as effective in current market conditions, its effect on the net GET float is diminished (due to higher prices of GET). Now that the protocol is maturing and a diverse set of ticketeers will soon join its ranks, it is warranted to reflect if the model is most effective for this new environment/user base.
The buyback & make model as introduced by placeholder is designed to align the market and the producers of the protocol (ticketeers). Instead of the market and producers to have mirrored incentives in regards to economic policy of the protocol, the buyback & make model creates a nexus (the smart treasury) that is funded by the fees generated by users (whom are served by the producers).
Adopting this model on itself won’t change the fundamental utility and scarcity realities of GET (deflationary, capped supply, fuel for tickets). The model merely manages where the value flowing into the protocol by users ends up. The DAO could decide for the value to be stored in the treasury or to be allocated to burns, staking rewards or investments in growth of amount of producers or stimulating the users.
This might seem like an be a dense and overly abstract subject, but those having observed governance in the crypto space will know that it is key to think about these dynamics. Without common ground decentralized governance will remain in a gridlock. The token holders/market will demand of the producers to insert more value into the protocol, whereas the producers want to maximize the amount of users they onboard.
By shifting the protocols value-lock to a shared treasury (that is controlled by token holders vote) a rallying point is created. This approach can be found in several protocols. For example Uniswap/Sushi have a model where they do not charge for pool creation or LP actions — as pools and LPs are their producers. A fee is charged to the users of these liquid pools. Due to this LPs and token holders are aligned as both benefit from more users. All resources of the protocols treasury will naturally flow to realizing this goal. If instead the economics where set up that value comes from LPs that pay a fee to add/withdraw liquidity — governance would most certainly be in an constant state of conflict as LPs and token holders have inverted incentives.
Relaying this to GET it could be interesting to explore if a value driver could be found in setting a ratio cut of the added value/profit ($ revenue) of the secondary market sales. As this metric taxes realized added value for both the user, as the producer as the market. This is just one of the various ideas we are playing with and which will be shared with the community when fully developed.
The transition to a new token economic model will be gradual and eventually involve the participation of the GET DAO. New models don’t cancel or replace old mechanisms. Economic policies are meant to work together and create ‘synergies’ (yes we are going all-in on vague business jargon, deal with it). Focussing on user revenue doesn’t mean that ticketeers use the protocol for free (as the Uniswap example could be interpreted, it certainly shouldn't) ticketeers should be charged to the extent it makes economical sense to pay(making the protocol competitive on pricing). It is all about finding a simple and effective harmony for the tokens utility, the governance and user growth(in amount, added value and of course revenue).
All ideas, initiatives or critiques are more than welcome!
More about GET Protocol
Where to buy GET
Want to get your hands on some GET tokens? Here’s an easy guide.
If you would like to see the GET token listed on specific exchanges, the best way to do this is to (publicly) let exchanges know about the project. The more they hear about it from actual traders, the better!