Poll questions for KTON buyback and BTC DCA

[SasoLithops]

Since RING is no longer inflationary and no new tokens will be minted under the current design, we propose that KtonDAO utilize 500K RING from the treasury—which currently holds 523.38K RING—to buy back KTON(on Uniswap Base) and BTC(on Hydration).

Specifically, we suggest allocating 250K RING for KTON buybacks and 250K RING for BTC purchases.

We will leave this voting time on for 2 weeks, that is until Sunday 18th May 18 UTC. Then we will write and post a proposal on KtonDAO DeGov. So PLEASE vote.

@hackfisher @hujw77 If this is hard to do by code/SC, we could do it manually. We can also announce when buyback will happen. And Jesse pointed out a new multi-sig account on Hydration should be created for KtonDAO to be able to buy and hold BTC.

[nblogist]

35% KTON and 65% BTC

[sonoferin2000]

I chose pure BTC, as it is the gold standard. but later had the thought that we have a unique opportunity to instead use those funds to purchase 500k ring equivalent of those Lord of the Rings NFTs. We are guaranteed to turn that 500k ring into a million, which i think is a wise move for us to make..We would have to wait for the unlocking period, but it is a guaranteed doubling of the amount of ring we would have. By going this route, we could also do one of the other options and still be able to retain 500k ring in treasury. We wouldn't get immediate gratification, but i think it is the better option, in my opinion.

[A-hogic]

Before I vote, can someone please explain the main purpose of a buyback and how it will affect KTON in general (e.g., reduced supply, increased value, price stabilization)? I would like to understand the motives behind it, as I don’t have enough knowledge. Thank you.

[SasoLithops]

Hi @A-hogic !

Thank you for asking. Very good question.

Actually there are a few factors behind buying KTON.

The main being we get some KTON into Treasury. That will as you correctly wrote already reduce circulating supply for the time it is kept in Treasury. While in Treasury members of KtonDAO can vote on what to with it:

• We can stake it to earn some aditional RING (Also good idea is from @sonoferin2000 to buy some Lord of the Rings NFT maybe it can be done with staking rewards)
• Also we can use some of that KTON to increase liquidity on Base (that is something that will need to be done in near future as at the moment the ammount we have to provide liquidity is 4000$-ish, which is quite low)
• Some can be used for potential airdrop to active participants in governance (like you are showing here)
• Any other idea also welcome

As for increased value we can not make any guarantees as it depends on demand which is hard to predict. We hope Tokens Index on Base will push the demand and hopefully some of us come up with another usecases for KTON. Having more tokens in treasury will decrease the risk that was being dependant only on one token.
Also funding a future development is imho easier with multiple tokens in Treasury. If you only depend on one token you usually put high sell pressure when you fund something big as you have to sell large quantites of that token which highly affects the price especialy if demand on the other end is low.

I personally hope these buybacks will happen up to four times per year, but all is up to KtonDAO to decide. And what tokens to buy and do with them.

Hope I answered your question. Let us know what you think? And feel free to ask any questions you may have.

[A-hogic]

Saso, I appreciate your feedback and explanation. I agree with a 50/50 split allocation between KTON and BTC. And like you said, I really hope the demand for KTON will increase in the future!

[hackfisher]

I suggest do it a simple one time swap on base to cbBTC delegated to the manager multisig.

[SasoLithops]

Hi @hackfisher!
Great idea. Base is perfect solution👏

[hackfisher]

Please also consider adding RING-KTON, KTON-cbBTC liquidity on Base pools, this can support user swap and upcoming index fund, build the market, collect the swap fees.

[SasoLithops]

Yes this is why those KTON buybacks as we have RING and need more KTON to pair it up. Now with cbBTC buys we can start building liquidity on that pool too.
This could be more long term vision.

[SasoLithops]

Hi everyone!

Thank you @nblogist @sonoferin2000 @A-hogic @hackfisher for participation. The conclusion of this debate is that cost would be too high to experiment with small ammount(500k Ring for this proposal). And since at this time KtonDAO can not fund itself this is for now the only option.

Probably best conclusion therefore is we wait a few months to gather more Ring in treasury and do this all at once.