Using Protocol Revenue for MNGO Buyback

Governance
#1

Is there a price where the DAO would be willing to buyback MNGO?

Some thoughts:

  • The book value is currently ~.06/MNGO. I’d like to think we never get the chance to buy there, but is there a price at which the DAO supports buying?

  • The MNGO ICO was at ~.14/MNGO. The DAO buying at any level below there would effectively be averaging down the cost for all MNGO holders.

  • I would recommend using only protocol revenues (currently ~$700k) for the buyback, and not necessarily all of it.

  • I don’t think DAO funds should be used for speculating; however, this seems like a use of funds that is in line with a long term vision for the protocol/DAO.

  • Because of the slow moving nature of a DAO, the best buying opportunities in crypto (i.e., liquidation cascades) will likely only be accessible to the extent the DAO has resting bids in place.

Ultimately, I think this could serve as an interesting proof of concept for managing the DAO treasury. If this were to have support, I would be in favor of placing bids up to around 2x the book value (i.e., .12/MNGO).

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#2

Just curious how did you compute the book value? also in general it makes sense to buy protocol tokens back when they are cheap and sell when they are expensive, but I am unsure how much use the buying would be when Circulating Supply << Total Supply

#3

@_69 we enabled the DAO to trade on Mango. If you want to it is now technically to make such a proposal, here’s an example of something @brian_smith_0 has been working on https://dao-beta.mango.markets/dao/MNGO/proposal/EwoNQ4WmyvGeNv7jxjP91ijKfDhaPrUvt88ZYsUpgDTd

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#4

I wanted to share a very brief slide deck ahead of the meeting this week. The slides provide more information regarding the Volume-Weighted Average Price (VWAP) token repo program I mentioned during the last call. I can answer any questions during the call.

Link: https://github.com/abacus-x/mngo-repo

The slides are brief and include the following items:

  • Why use VWAP
  • High level design
  • Example of how a program could be implemented

If there is an interest in pursuing the matter further I am happy to write the program for the DAO.

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#5

Connecting this thread to a proposal to use Downside Staking Options to achieve the buyback. Please see details here: Dual Finance - Mango Staking Options Proposal

#6

@brian_smith_0 would be good to get your feedback here since you’re running the existing buy back, but I don’t think any buybacks make sense at all unless we have full dilution of the available mngo in the vaults. Otherwise we’re swapping USDC now (which can be used to hire / insurance/ marketing) for mngo which 1) isn’t liquid 2) can’t be used as widely as USDC 3) doesn’t make sense since the DAO has 3.9 bil in reserves

Much rather vote to burn more of the 3.9 bil like this vote: Realms

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#7

I don’t see the benefit of debating the outstanding buyback since it has been discussed ad nauseum and was passed with an overwhelming majority.

I briefly discussed an options implementation with @DonDuala . I agree the DAO is leaving some money on the table by using limit orders vs. selling puts.

Dual Finance would give the option value benefit to MNGO holders but I don’t think that makes sense for Mango. This generates a bunch of work for the DAO and delivers de minimus value to each MNGO holder in this instance.

In hindsight, the DAO could have sold an OTC put via an on-chain platform and that would have been a better implementation of our buyback. This would have given $100k or so in proceeds to the DAO. However, I don’t think it is worth reworking at this stage, especially since the value has declined with our 4.6c order getting filled and markets rebounding.

Was there something else you wanted addressed @klossie5?

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