Thanks for raising this.
- Burning tokens generally doesn’t add any value apart from giving a better perspective on PR / marketing’s end. This is a great article you can refer to : placeholder.vc/blog/2020/9/17/stop-burning-tokens-buyback-and-make-instead
I would suggest perhaps we can do both buyback to distribute and buyback to burn. This is what likely will happen once buyback mechanism is being implemented:
1.Staking rewards & trading fee rewards increase (resulting from buyback)> 2. SEFI token value increases > 3. SEFI token awareness increases > 4. Protocol awareness increases > 5. Trading volume increases / more liquidity is being attracted> 6. Trading fees increase > Back to 1
I personally think that a greater % of the fees should allocate to buyback at least in the first year since most of the SEFI rewards are given to LPs. Moreover, higher APYs for providing liquidity that results from higher SEFI price is definitely more sustainable than providing LPs with inflationary rewards.
Out of the current 0.3% of fees allocated to LPs, I’m in favour of moderating it to 0.15% to LPs, 0.1% to buyback and distribute and 0.05% to buyback and burn. FYI Decentralised trading protocols such as WooTrade and Perpetual Protocol are allocating 50% of their fees to buybacks too.
- and 3) look good to me.