# \#1 - ETHFI DAO Proposal: ETHFI Buyback and Liquidity Pool Seeding **URL:** \ **Category:** Protocol & Proposals\ **Created:** [June 19, 2024, 6:41pm UTC](https://governance.ether.fi/t/1-ethfi-dao-proposal-ethfi-buyback-and-liquidity-pool-seeding/994 "2024-06-19T18:41:29Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![ether.fi](https://yyz1.discourse-cdn.com/flex003/user_avatar/governance.ether.fi/ether.fi/32/341_2.png) [@ether.fi](https://governance.ether.fi/u/ether.fi)\ **Post date:** [June 19, 2024, 6:41pm UTC](https://governance.ether.fi/t/1-ethfi-dao-proposal-ethfi-buyback-and-liquidity-pool-seeding/994/1 "2024-06-19T18:41:29Z")
**Proposal Summary** This proposal suggests initiating the purchase of ETHFI with up to 50% of protocol revenue. Initially 5% of monthly revenue will be used, with future increases to be put to a community vote. The revenue comes from Staking and Liquid vaults. Any revenue of future products to be used for this purpose will be addressed in a subsequent vote. The purchased ETHFI will be used to build the treasury and seed a liquidity pool on Curve to increase TVL on-chain for ETHFI. **Rationale** The objective of this proposal is to enhance the liquidity of ETHFI in order to support the ecosystem by: 1. Increasing the treasury holdings of ETHFI. 2. Providing liquidity on Curve, thus improving market dynamics for ETHFI. **Details** _Revenue Allocation_ - Initial Allocation: 5% of protocol monthly revenue. _Sources of Revenue:_ - Staking rewards. - Liquid vault revenues. - Review Period: This allocation percentage will be reviewed and potentially adjusted based on performance and community feedback. _Buyback Mechanism_ - Market Purchases: ETHFI will be bought on the open market using the allocated revenue. - Treasury Allocation: Acquired ETHFI will be added to the DAO treasury to bolster holdings. _Liquidity Pool Seeding_ - Curve Pool Seeding: Part of the acquired ETHFI will be used to seed a liquidity pool on Curve. - Objective: Increase TVL and liquidity for ETHFI, facilitating better trading conditions and user engagement. **Conclusion** This proposal aims to strategically utilize protocol revenue to enhance the liquidity of ETHFI. By purchasing ETHFI on the open market and seeding the liquidity pool, we can strengthen the ecosystem and increase TVL on-chain. **Voting** Voting to be done through snapshot: [Snapshot](https://snapshot.org/#/etherfi-dao.eth/proposal/0x287dffb9a390857c846c4b98c70b825ad740d5b3566ae786f23041b1ce72c428) - For: Approve the ETHFI Buyback and Liquidity Pool Seeding Proposal. - Against: Do not approve the proposal. We look forward to your support in strengthening the ETHFI ecosystem. ---
**Author:** ![LLj24](https://avatars.discourse-cdn.com/v4/letter/l/ec9cab/32.png) [@LLj24](https://governance.ether.fi/u/LLj24)\ **Post date:** [June 19, 2024, 7:29pm UTC](https://governance.ether.fi/t/1-ethfi-dao-proposal-ethfi-buyback-and-liquidity-pool-seeding/994/2 "2024-06-19T19:29:03Z")
Thanks for the proposal. I support buyback and POL. Not sure about the amount though, but this stepwise approach seems a sensible way. 1 question: why a pool on Curve? Has it been discussed somewhere? Uniswap, Balancer and co all have their merits, no? ---
**Author:** ![newreign](https://avatars.discourse-cdn.com/v4/letter/n/c5a1d2/32.png) [@newreign](https://governance.ether.fi/u/newreign)\ **Post date:** [June 19, 2024, 8:27pm UTC](https://governance.ether.fi/t/1-ethfi-dao-proposal-ethfi-buyback-and-liquidity-pool-seeding/994/3 "2024-06-19T20:27:46Z")
Buying back is a nice move, especially from the open market ,I do not know why crv is the choice here though, nothing wrong with that and I hope community continue to remain in support of you guys ---
**Author:** ![GHprocure](https://avatars.discourse-cdn.com/v4/letter/g/e5b9ba/32.png) [@GHprocure](https://governance.ether.fi/u/GHprocure)\ **Post date:** [June 19, 2024, 9:56pm UTC](https://governance.ether.fi/t/1-ethfi-dao-proposal-ethfi-buyback-and-liquidity-pool-seeding/994/4 "2024-06-19T21:56:24Z")
I support buyback and liquidity pool. ---
**Author:** ![Sergey\_Lopatin](https://yyz1.discourse-cdn.com/flex003/user_avatar/governance.ether.fi/sergey_lopatin/32/80_2.png) [@Sergey\_Lopatin](https://governance.ether.fi/u/Sergey_Lopatin)\ **Post date:** [June 19, 2024, 9:56pm UTC](https://governance.ether.fi/t/1-ethfi-dao-proposal-ethfi-buyback-and-liquidity-pool-seeding/994/5 "2024-06-19T21:56:26Z")
+1 Approve the ETHFI Buyback Also wondering, if any plans for burning mechanism? I think it’s benefit for long term use case! Thank you! ---
**Author:** ![California0105](https://avatars.discourse-cdn.com/v4/letter/c/bbe5ce/32.png) [@California0105](https://governance.ether.fi/u/California0105)\ **Post date:** [June 19, 2024, 10:17pm UTC](https://governance.ether.fi/t/1-ethfi-dao-proposal-ethfi-buyback-and-liquidity-pool-seeding/994/6 "2024-06-19T22:17:03Z")
I agree with you about the redemption and liquidity pool. Thanks for the great suggestion. ---
**Author:** ![ether.fi](https://yyz1.discourse-cdn.com/flex003/user_avatar/governance.ether.fi/ether.fi/32/341_2.png) [@ether.fi](https://governance.ether.fi/u/ether.fi)\ **Post date:** [June 19, 2024, 10:20pm UTC](https://governance.ether.fi/t/1-ethfi-dao-proposal-ethfi-buyback-and-liquidity-pool-seeding/994/7 "2024-06-19T22:20:21Z")
Given the relatively small initial allocation, having one place to concentrate liquidity was the most advantageous. As this position will also not initially be actively managed, it was the preferred approach. As the DAO grows and future contributors take form, the methods of building liquidity on chain for ETHFI will evolve and take on more advanced strategies. It is agreed that the other dexes mentioned have merits and can be discussed for future increases. ---
**Author:** ![0xluude](https://avatars.discourse-cdn.com/v4/letter/0/97f17d/32.png) [@0xluude](https://governance.ether.fi/u/0xluude)\ **Post date:** [June 20, 2024, 1:34am UTC](https://governance.ether.fi/t/1-ethfi-dao-proposal-ethfi-buyback-and-liquidity-pool-seeding/994/8 "2024-06-20T01:34:19Z")
You should really consider other liquidity venues that offer far more capital efficiency and are just outright better than Curve, such as Maverick. They have just launched their v2 and have many advantages over Curve or even Uniswap. Choosing Curve as a liquidity venue becuase its hands off its not only a waste of time in the long run, it is a waste of resources and delays the inevitable which is leaving Curve for more efficent trading venues. ---
**Author:** ![Kairos\_Res](https://yyz1.discourse-cdn.com/flex003/user_avatar/governance.ether.fi/kairos_res/32/125_2.png) [@Kairos\_Res](https://governance.ether.fi/u/Kairos_Res)\ **Post date:** [June 20, 2024, 1:34am UTC](https://governance.ether.fi/t/1-ethfi-dao-proposal-ethfi-buyback-and-liquidity-pool-seeding/994/9 "2024-06-20T01:34:23Z")
We appreciate this proposal coming forward and the clear desire of the foundation, or whoever may be representing the EtherFi admin account, to create a mechanism to support the liquidity of the ETHFI token. We have spent plenty of time analyzing the liquidity and utilization of not only weETH, but other LRTs, and we understand its importance in depth. However, we have some material concerns and open questions with this proposal before we make our decision. ### Concerns with the Buyback: 1. **DAO Treasury Allocation:** 2. **Revenue Allocation:** 3. **Inflation:** 4. **Liquidity Incentives:** ### Questions and Concerns about Curve: 1. **Current Liquidity Landscape:** 2. **Paired Assets:** 3. **Execution Details:** ### Further Considerations: 1. **Reinvesting Protocol Revenue:** 2. **Impact of Large Unlocks:** 3. **Proposal Aims:** 4. **Liquidity Pool Volume:** 5. **Revenue Structure:** ### Governance Process: 1. **Expedited Process:** 2. **Delegate Incentives:** 3. **Delegate Influence:** 4. **Thoughtfulness in Planning:** In general, it seems like it would be more economical to take a chunk of the ETHFI in the treasury and create a protocol owned liquidity pool with that. Also, this should not be spun as “bolstering the treasury”. Hasu, a strategic advisor at Lido has written ad nauseam about [this](https://uncommoncore.co/a-new-mental-model-for-defi-treasuries/). Overall, EtherFi’s revenue streams are growing at an incredible rate for a protocol that is still so young. The buy-back is uneconomical in our opinion, and does not serve the best interest of the protocol’s long term growth potential. The 5%-50% range of allocation used for buybacks, could quickly go from “experimental” to “reckless” if there are no clear guidelines for what would constitutes success here. See our assumptions and projections to for a brief quantitative analysis on the potential impact of this proposal. ![Untitled presentation (23)](https://canada1.discourse-cdn.com/flex003/uploads/etherfii/original/1X/19b1ebc4a86c6bb3e11fb7b9b85ef1ca25be8a18.png) We look forward to gathering more information on the proposal before we make our decision, and we hope that others weigh in and make thoughtful decisions here. ---
**Author:** ![ocho](https://avatars.discourse-cdn.com/v4/letter/o/e8c25b/32.png) [@ocho](https://governance.ether.fi/u/ocho)\ **Post date:** [June 20, 2024, 4:04am UTC](https://governance.ether.fi/t/1-ethfi-dao-proposal-ethfi-buyback-and-liquidity-pool-seeding/994/10 "2024-06-20T04:04:23Z")
Sounds great!Lets do it ---
**Author:** ![alexmybroker](https://avatars.discourse-cdn.com/v4/letter/a/c67d28/32.png) [@alexmybroker](https://governance.ether.fi/u/alexmybroker)\ **Post date:** [June 20, 2024, 1:41pm UTC](https://governance.ether.fi/t/1-ethfi-dao-proposal-ethfi-buyback-and-liquidity-pool-seeding/994/11 "2024-06-20T13:41:29Z")
Definitely - FOR! Good proposal! ---
**Author:** ![tony](https://avatars.discourse-cdn.com/v4/letter/t/ee7513/32.png) [@tony](https://governance.ether.fi/u/tony)\ **Post date:** [June 20, 2024, 1:41pm UTC](https://governance.ether.fi/t/1-ethfi-dao-proposal-ethfi-buyback-and-liquidity-pool-seeding/994/12 "2024-06-20T13:41:49Z")
> [@LLj24](#): > > I support buyback and POL I support buyback and POL too, makes a lot of sense in the diluated market we are getting these days ---
**Author:** ![thedawn](https://avatars.discourse-cdn.com/v4/letter/t/919ad9/32.png) [@thedawn](https://governance.ether.fi/u/thedawn)\ **Post date:** [June 20, 2024, 3:53pm UTC](https://governance.ether.fi/t/1-ethfi-dao-proposal-ethfi-buyback-and-liquidity-pool-seeding/994/13 "2024-06-20T15:53:24Z")
> [@GHprocure](#): > > I support buyback and liquidity pool. I support buyback and liquidity pool. ---
**Author:** ![cryptomtn11](https://avatars.discourse-cdn.com/v4/letter/c/9d8465/32.png) [@cryptomtn11](https://governance.ether.fi/u/cryptomtn11)\ **Post date:** [June 20, 2024, 3:53pm UTC](https://governance.ether.fi/t/1-ethfi-dao-proposal-ethfi-buyback-and-liquidity-pool-seeding/994/14 "2024-06-20T15:53:31Z")
Looks sensible lets move forward ---
**Author:** ![DDDD](https://avatars.discourse-cdn.com/v4/letter/d/97f17d/32.png) [@DDDD](https://governance.ether.fi/u/DDDD)\ **Post date:** [June 20, 2024, 3:53pm UTC](https://governance.ether.fi/t/1-ethfi-dao-proposal-ethfi-buyback-and-liquidity-pool-seeding/994/15 "2024-06-20T15:53:36Z")
great idea! agree with this proposal ---
**Author:** ![Bitcoin](https://yyz1.discourse-cdn.com/flex003/user_avatar/governance.ether.fi/bitcoin/32/146_2.png) [@Bitcoin](https://governance.ether.fi/u/Bitcoin)\ **Post date:** [June 20, 2024, 3:53pm UTC](https://governance.ether.fi/t/1-ethfi-dao-proposal-ethfi-buyback-and-liquidity-pool-seeding/994/16 "2024-06-20T15:53:42Z")
💯 💯 💯 this is amazing ! ---
**Author:** ![sahilk](https://avatars.discourse-cdn.com/v4/letter/s/ce7236/32.png) [@sahilk](https://governance.ether.fi/u/sahilk)\ **Post date:** [June 20, 2024, 3:53pm UTC](https://governance.ether.fi/t/1-ethfi-dao-proposal-ethfi-buyback-and-liquidity-pool-seeding/994/17 "2024-06-20T15:53:47Z")
The proposal lists down good options and will be beneficial ---
**Author:** ![Keivzouz](https://avatars.discourse-cdn.com/v4/letter/k/5daacb/32.png) [@Keivzouz](https://governance.ether.fi/u/Keivzouz)\ **Post date:** [June 20, 2024, 3:53pm UTC](https://governance.ether.fi/t/1-ethfi-dao-proposal-ethfi-buyback-and-liquidity-pool-seeding/994/18 "2024-06-20T15:53:51Z")
Hi, I approve the ETHFI Buyback and Liquidity Pool Seeding Proposal. ---
**Author:** ![maybeyonas](https://yyz1.discourse-cdn.com/flex003/user_avatar/governance.ether.fi/maybeyonas/32/138_2.png) [@maybeyonas](https://governance.ether.fi/u/maybeyonas)\ **Post date:** [June 22, 2024, 7:54pm UTC](https://governance.ether.fi/t/1-ethfi-dao-proposal-ethfi-buyback-and-liquidity-pool-seeding/994/19 "2024-06-22T19:54:29Z")
I’m strongly against this for the same reasons as stated by @Kairos_Res. We have never seen a case where BuyBacks have ever worked. Buybacks of ETHFI only seem to be like a strategy to siphon revenue from the DAO to the ETHFI vesters. Interesting that the proposal was rushed (lack of clarity in gauging the success and failure of this initiative) and was passed within 24 hours of discussion. also, agora states 1.5M ETHFI eligible to vote. ![image](https://canada1.discourse-cdn.com/flex003/uploads/etherfii/original/1X/56cb1e8070f9bf0ffd018be3f50dcd2a2db90959.png) but 1.8M have voted already. ![image](https://canada1.discourse-cdn.com/flex003/uploads/etherfii/original/1X/5014112ada85a823179d948944e8e34ef60ccb10.png) ---
**Author:** ![AlisWise](https://avatars.discourse-cdn.com/v4/letter/a/b5a626/32.png) [@AlisWise](https://governance.ether.fi/u/AlisWise)\ **Post date:** [June 22, 2024, 7:54pm UTC](https://governance.ether.fi/t/1-ethfi-dao-proposal-ethfi-buyback-and-liquidity-pool-seeding/994/20 "2024-06-22T19:54:34Z")
I think that the idea of buyback is great! Tottaly for! [Next page](https://governance.ether.fi/t/1-ethfi-dao-proposal-ethfi-buyback-and-liquidity-pool-seeding/994.md?page=2)