Sam Kazemian, founder of Frax Finance, expressed support for a proposal by Ouroboros Capital pushing for a more aggressive altcoin buyback strategy. Here are the details…
Critical proposal for altcoin project
Frax Share (FXS) is known for its current buyback strategy where the project buys and burns the same amount of FXS over a predetermined time frame regardless of any price fluctuations. The project has a fund of 20 million dollars for this purpose. Ouroboros Capital, a cryptocurrency investment research firm, submitted a proposal on June 16 that calls for a proactive optimization of the current token buyback strategy.
The proposal suggested initiating a $1 million time-weighted average price (TWAP) buyback when the FXS price drops below $5. If the price drops below $4, it is suggested that an additional $1 million buyback set for a period of 1 month is activated. The mainstay here is to buy more FXS tokens for subsequent burns as the price drops further. According to CoinGecko, this is happening as the price of FXS, which is currently $5.30, plummets towards $5. Kazemian said in a statement:
I believe the most logical use of our income and capital is to buy and burn the FXS supply. I cannot foresee a more effective use of capital, especially given the low valuations in a mature ecosystem due to macro market conditions and the state of the global economy.
Will there be more aggressive token buying?
Kazemian echoed Ouroboros Capital’s suggestion, expressing that he agrees with the general idea of accelerating the TWAP mechanism as the price drops to $4, $3, and $2. “If the price continues to drop, we should buy back more tokens more aggressively,” he added. Frax Share (FXS) is a key component of the Frax Finance ecosystem, a decentralized finance (DeFi) platform known for its unique approach to stablecoin issuance. While the Frax stablecoin (FRAX) aims to maintain a stable value relative to the US dollar, FXS plays a vital role in managing and collateralizing the protocol.
cryptocoin.com As we reported, Frax Finance is a DeFi platform that issues a stablecoin called FRAX. It combines the features of collateralized and algorithmic stablecoins to create a partially collateralized stablecoin. Frax Finance aims to eliminate the disadvantages of both types of stablecoins by providing a more stable and decentralized solution. Frax Finance’s liquid staking protocol is a liquid ETH staking designed to uniquely leverage the Frax Finance ecosystem to maximize staking efficiency and streamline the Ethereum staking process for a simplified, secure and DeFi-specific way for users to earn interest on ETH. It allows them to stake ETH in exchange for its derivative, Frax Ether (frxETH).
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