'Buyback and Stake it’ idea/ SIP proposal

Where will the buying mechanism get its buying power from? Which funds will be used to buy SOV from the market in your proposal?


The buying mechanism will gain power at the expense of stakers. Depending on the SOV market price, will have different buying power when SOV price is lower. The platform fees and revenue that are supposed to be distributed to stakers will be less. The mechanism should be in place the moment that any revenue for stakers (this does NOT include liquid SOV as the amount people get is fixed anyway) is generated by the platform then deduct that revenue according to the % of Buying Power. The deducted revenue will instantly buyback SOV and place it into the SOV Pool. Then any rewards that pool generates will be distributed to everyone who participated in the creation of that pool, subject to snapshots.

We need to set aside all revenue in terms of SOV (no point in buying SOV of the market using SOV), so we are just talking about the protocol fee share in rBTC right? The buying mechanism would have a max 20% of the rBTC fees payed to stakers? Is that significant in terms of its effect on the circulating supply of SOV?

Just trying to tease out some details before forming an opinion on this.

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so lets say i staked for 3 years under this mechanism, sending lots of RBTC fees to this SIP for buying SOV off the market.
i decide to unstake for whatever reason. i loose all my rights in the pool? will i get liquid SOV from that pool back into my wallet? because at the end, i spent 3 years paying RBTC fees for buying those SOV

or other solution, i will keep my pool power for the share i got in that pool (for ever), of course my share would become less if the pool gets bigger or my share gets bigger when the pool becomes smaller.

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Well it is expected to have bigger traffic on the platform when all the weapons are out in the market (ZERO etc). 20% fees of the rBTC fees payed to stakers will be used to buy SOV. In terms of significance, the cheaper the SOV is, the more SOV will be staked from the mechanism. I am not in position to give you exact numbers, this is something that depends from many factors, like how many people are going to use the platform in the future. But keep in mind, from that pool you will also be rewarded with SOV and rBTC, it will act as a MEGA whale staker without voting rights, and because you contributed in its creation, you will be rewarded back.

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it will be up to the stakers if they want to keep the mechanism on forever or not, maybe in a different SIP, if this one goes to voting stage. The idea is to not give back SOV from that pool, and only generate fees to stakers. You paid rBTC for the creation of that pool but you got back liquid SOV and rBTC too as it gives you rewards back.

But what you said is logical, maybe the Pool Power can stay permanently connected with your wallet, even if you stop staking one day. So you will be able to continue getting rewards back (of course your rewards will become lower in time as you stopped getting pool power, and others who continue staking will grow in rewards). Sounds good and I don’t see why it cant be implemented

So let me see if I have it right:
At the moment, every 14 days I get a payout from 3 different sources: Reward SOV as incentive for providing Liquidity to various LPs; Liquid SOV as incentive for staking; and Fees Earned in both SOV and rBTC.
Your proposal is that only the third one of these sources will be used to build up the proposed pool. Depending on the SOV/xUSD exchange, between 1% and 20% of the Fees Earned will be sent to a Smart Contract which will buy SOV and stake it for 5 years, so the SC will itself earn further rewards and fees. So I will still get all the Rewrd SOV from LPs and the Reward SOV from SIP-24, and (initially) 80% of the Fees Earned.
I am still not sure when this sequestered pool will pay out - will it be after the 5 years, or some other time? Or does it exist forever, always paying out its fees earned to those who are still staked, but for those who unstake, they loss the WhalePool rewards as well?
I am interested in the Maximum Capacity clause: the WhalePool will keep taking in fees levy until it reaches 50M SOV, and then the levy will stop for ever, but the payouts will continue

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Here’s my personal investment thesis: i stake SOV at max duration, i compound liquid SOV as well as rbtc payouts and i get a huge apy. i do everything such a pool would do, but i keep the rewards that i deserve, i hold my funds and my voting power. i am not willing to give up part of my rewards as i’m already underwater due to token price.
In addition to that, locking away SOV for tightening the supply is a very wrong approach for a governance token. We want a lot of SOV to be broadly distributed to increase protocol security and decentralization. Bonding curves might be a better approach but will take some time. For Mynt it seems to work well so far.

I agree that something should be done to stabilize the token price. When Sovryn leaves alpha and we want to onboard new users, everyone will look at the chart and go away.

Nothing is better advertisement for the protocol and onboarding new users than an increasing token price.


I do something similar: I actively collect my rewards when they appear, and I collect my Vesting contract tokens as soon as they become liquid, and either stake them or put them back into Liquidity Pool. My longterm plan is to never sell my SOV, but keep them always staked to the max, no matter how much they might fall. I hope to take advantage of the fees earned to supplement my income.
Having said that, I am very frustrated at the sagging price. The proposal here would guarantee a willing buyer in the WhalePool which will promise to buy SOV every time a payout happens, and the lower the SOV price the more it will buy. I will need to look at the total fees earned across the whole dApp and see just how much we are talking about.
It seems that this is similar to a share buyback that sometimes happens in the stock market, when cash dividends are reduced in favour of the company buying its own shares. The result is that there are fewer shares in circulation, and those shares that remain in circulation get a greater share in future profits.
The uncertainty is in whether this WhalePool will have enough resource to buy enough SOV to reverse the slump in SOV price. At the moment we are in a bear phase for all cryptos, and we have no idea how long this will last for.

Let us suppose that the bear market lasts another year or so, and the SOV price remains <$10
(a) If we pass this SIP, we will end up paying a levy without knowing in advance whether it will succeed in its objective by raising the SOV price. If it fails to do this, we will lose the 20% levy on our Fees Earned, but gain them back again as payout from the WhalePool as long as we stay staked. I just will not have the actual rBTC that I earned, which will be irritating, but I will continue to get the income, just diverted through the Whalepool.
(b) If we reject this SIP, we can individually do much the same thing: re-invest our Fees payouts in SOV or do whatever we wish, and we will have those tokens in our own wallet to do what we wish.

On the other hand supposing we start another bull run by summer, and SOV climbs to >$50 (or higher)
(a) If we pass this proposal, we will still be paying a levy, but it will get smaller as SOV climbs, and we will get the increased income from the WhalePool, and we will be delighted with the rising price. The only down side is that our Accumulate phase will be shortened in time.
(b) If we reject this proposal, we will still be happy with the rising SOV and rising income.

I am still thinking this through, but I am starting to move in favour of this proposal.

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While such ‘out of the box’ initiative is nonetheless to be commended, rather than make early staking an even harder sell than it already is I think that much the same effect could ultimately be achieved with lower friction and significantly less complexity via the twofold approach I already outlined in response to @Martin_Adriaan’s SIP of a few days ago—to wit:-

As both a long-term Sovrynaut and also provider of sizeable liquidity to the XUSD lending pool, I can personally vouch that there currently exists no single greater deterrent nor detriment to maximising my active stake at any given opportunity than the necessity of first encumbering said stake within an expensive vesting contract—which is in this scenario quite redundant—and then being forced to eke out withdrawals over the ensuing ten months, at >$6 apiece.

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A funny thing happened on the way to the Forum just now:
I saw Sacro’s post here:

which to me seems to be a strong argument against the SIP proposal.
If we accept the thesis of the above, and just set aside the global crypto bear market, we should expect some SOV inflation for most of this year and use the opportunity to DCA and collect as much SOV as possible, and then in a year’s time the new supply of liquid SOV will suddenly shrink while the income will grow.

I like the idea of supply being purchased with a share of revenue because it does feel like we will have nothing but token releases and sell offs. I wonder if it would be possible to have similar metrics to your suggestion @SOV_HOOLIGAN however instead of a lock we burn those percentages. Perhaps adding a small burn fee on to non stakers wallets sov swaps. A burn might be nicer as it feels as though here we are just delaying the flood some years.

Burning was proposed before in the forum, but people were not in favor of it and the idea is abandoned. I understand those who are skeptical, and do nothing is always a choice. They have the view that future is going to be massive adoption, I want that too as a person who holds SOV and staked for long time. However, this is something that MIGHT/WILL (use any word you like) happen in the future. The proposal here is more focused to a ‘What if’ scenario and start taking action from now. So no matter what happens there is always going to be a buying pressure. The mechanism power is bigger when the price of SOV is low. On the opposite, its 1% when the price is above 100$. 5% when the price is 50$. Are these prices impossible for SOV? Of course not. Would it be faster if we reach those levels when we store SOV away in SOV pool? In my opinion it will. Imagine you contributed in the creation of the SOV pool and stored many SOV there, and the price now is above 100$, while all this period you are getting rewards from that pool, and now you only contribute 1% of your rewards. Would it be more beneficial in the long term? In my opinion, it will be.

I would propose a SIP if I knew how to start tipping content creators. These people write articles and videos here at this forum and Reddit and even extend it to YouTube to bring more attention to our project because people will be more willing to know about Sovryn.

Tipping articles is something BCash is doing already with ReadCash, and Publish0x is another example. At first, writers will only seek the tips, but eventually, as people learn more and more about Sovryn, those people that come will bring their money from other altcoins, just like I did.

that’s good friend, but I am not sure how this is related to the buyback mechanism that is proposed here

The buyback is to improve the price so that when people come, they don’t see a project dying, but that means you need people coming to see you in the first place, giving people some tips could bring those eyes directly and to earn first but stay later because newcomers adopt the project.

I forgot to write that this could be a killer combo; your proposal improves the price mine brings new eyes, both profit. In other words, I am looking for support for my idea.

When do you plan on putting this SIP up for a vote?

I will give you a picture of how I see this, when many people want this to happen, it will happen, right now I only see people complaining about inflation and price going lower without proposing anything as a solution. I tried in the past to gather support for a similar SIP to burn SOV tokens. It was not successful. Now I bring this SIP up to tackle inflation and reduce circulation. I dont see many people been interested. Not sure how much VP will need to bring this up for voting - right now my VP is around 250k, might need around 500-600k more, unless Sovryn team is interested to support this and put it up for voting. From my side this is my last attempt to try and do something about the inflation. And to be honest I already feel that my actions are pointless. I come to the conclusion that many many people are happy with what is happening. At least I feel well with my self that I tried to change something that doesnt feel right to me.


This is a little unrelated to this particular SIP, but I just wanted to say that I share your feeling, both about the seeming lack of worry about SOV’s value from the team as well as your more general feeling about trying to contribute ideas here on the Forum. It feels pretty pointless, when the core team cannot find the time to share their opinions briefly. Speaking for myself, just a few sentences along the lines of “we dislike it for reasons X and Y” would be fine; but I find the utter silence just bordering the disrespectful, surely a few core teams members can find 5 minutes to share thoughts. People find the time to think constructively and propose things. They talk about “rewarding the community”; speaking for myself, I don’t need to be rewarded, I would like the Bitocracy to be functional and what that needs it that the team talks with the community. These discussions here feel like the late night discussions you have in an empty bar after everyone has gone home, pretty pointless. I’m going to promise myself that it was the last time I put time into proposing things, and just passively observe what those in power decide to build and do. I wish it was different.

About your proposal, I prefer to increase SOVs value/utility instead of reducing circulation; but I was following this discussion and it made me think (thanks for that, if that is worth anything :-)).


I agree that things don’t feel right at the moment, but the core team seems to be pretty much a “black box” making it hard to tell what’s really going on. Some of the messaging a month or so ago seemed quite impatient with “the community” for asking about launch dates, why strategy with sub-protocols had changed etc. Now we’re not getting much info at all.
So I’d like to say that I really value the care and work that you and @SOV_HOOLIGAN and others have put into proposals; and though I don’t have the knowledge to contribute much to many of these discussions I really appreciate the attempts to stimulate debate and make the community an active one; the fact that both of you are feeling disillusioned is very concerning, and I hope things change soon to enable all of us to generate more positivity

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