Updated buyback token economics: Introducing continuous buybacks

Kasper Keunen
Apr 23 · 9 min read

The 2019 Q1 buyback review

Extreme Gas wars: a screenshot of the transaction of the participant that managed to fill the entire buyback auction. Note the excessive Gwei price/gas this individual paid.

Winning, fair and square

Novelty surprise or situational surprise? We should keep in mind that even when a certain result is to be expected it can still be a shocking experience. Are we surprised? What did we expect? Is it even a bad thing?

Reflecting on the buyback

1. Disappointment in the community

2. Ineffective price exploration

3. Murky token economics

Currently, we are in Scenario 1 of this diagram. As buybacks become larger and larger, the amount of GET offered quoted below 0.50 will eventually dry up. This is because the arbitrage will allow any buyer of GET up until 0.50 book certain profit by bridging the gap.

Summary of shortcomings

TLDR: As long as GET trades below €0.50, the protocol will go to the open market continuously and directly hit orders in the orderbook to fill the protocols GET demand.

Continuous buybacks. How & when.

What about the guaranteed exchange rate?

Upholding the guaranteed exchange rate

In the scenario where the market price for GET is below €0.50. A new mechanism kicks in. By burning a portion of the acquired GET, the protocol effectively values GET at €0.50 / GET. Per definition GET that is burned is removed from the circulating supply.

Expected consequences of the continuous buyback

Execution timeline of the continuous buyback

Instead of a buyback auction every quarter, there will be ‘daily auction’ on exchanges, with a GET burn at the end of every quarter.

More about the GET Protocol

GET Protocol

GET Protocol updates and announcements

Kasper Keunen

Written by

Tokeneconomics Developer at the GET Protocol Foundation

GET Protocol

GET Protocol updates and announcements