I’m excited by this proposal. I’d like to engage with the buyback part of this proposal:
If liquidity requirements weren’t an issue, could this proposal pursue an open, onchain, and possibly more efficient solution instead? There’s a good bit of prior art here, and while the world may not be ready for TWAMMs, a dutch auction if done right could efficiently and fairly arrive at an optimal price for the Collective’s ETH. So why not a dutch auction smart contract that receives the monthly tranche of ETH and allows bidders to buy as much of it as they’d like w/ their OP?
How would this work and can I see a smart contract PoC?
To illustrate the idea using the dashboard for December data: we’d send 82.95 of the 165.9 ETH in revenue to December’s auction contract. Auction begins at some high OP/ETH exchange rate. As time passes, the exchange rate goes lower and lower until some bidder is incentivized to buy. She can purchase up to 82.95 ETH with her OP, but could purchase 1 ETH, or .1 ETH, etc, leaving the rest for other bidders. The auction continues, and the exchange rate slowly decreases, until all ETH has been purchased with OP! I wrote a quick PoC here, and would be happy to expand/secure it (factory pattern? algorithmic or oracle-based determination of start price? that’s my bag baby…)
A few possible benefits to doing this on-chain come to mind: no reliance on centralized OTC providers. No overhead or reliance on Foundation updating spreadsheets, etc. Maybe even creates demand for OP for auction participation? I’m no Mises, but I hope it’s not too late to explore on-chain solutions to convert treasury ETH into OP. I expect the DAB would love to help here, and I’d personally love to discuss more.