Ok so question… my understanding of one of the purposes

Question

Ok so question… my understanding of one of the purposes

of an FXS buyback with protocol profits is to support the price of FXS. If instead of a traditional buy you use fraxswap, you are (by definition) dampening that impact. How do you think about buybacks?

In the case of having to mint a lot of FXS it makes more sense… but I’m not really sure which scenarios the protocol mints FXS and puts it in a pool (doesn’t new FXS come from users burning FRAX? Is this just about providing them the option?)

#cryptocurrency #english #frax

0

04.06.2022

7 ответов

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Logarithmic Rex Salomon Автор вопроса

Sam Kazemian ¤⛓️¤
Well it is dampened in both directions right? I am...

Ok got it! So you explicitly acknowledge and accept the dampening as a good thing. And the idea is that the value accrual is in the reduction of outstanding supply NOT in price/oracle manipulation

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04.06.2022

Sam Kazemian ¤⛓️¤

Logarithmic Rex Salomon
Ok got it! So you explicitly acknowledge and accep...

Correct. The whole point of a TWAMM is mathematically efficient price execution over a long period of time that was not possible before onchain.

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04.06.2022

Logarithmic Rex Salomon Автор вопроса

Sam Kazemian ¤⛓️¤
Correct. The whole point of a TWAMM is mathematica...

I had a long discussion with pottedthings last night that basically ended up in a discussion how crypto pricing (especially today) is a poor barometer for value.

0

04.06.2022

Deon 🍄

Logarithmic Rex Salomon
I had a long discussion with pottedthings last nig...

Hey..read your thread on twitter today..Keep going

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04.06.2022

Deon 🍄

Sam Kazemian ¤⛓️¤
Correct. The whole point of a TWAMM is mathematica...

Link please to read more about twamm difference vs amm

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04.06.2022

Sam Kazemian ¤⛓️¤

Deon 🍄
Link please to read more about twamm difference vs...

https://docs.frax.finance/fraxswap

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04.06.2022

Sam Kazemian ¤⛓️¤ · Accepted Answer

Well it is dampened in both directions right? I am generally in favor of smoother price movements. MIM was famous for their "merlin candles" where they bought a ton of SPELL and created a 5 minute pump of +30% until it was immediately arb'd out. It basically made their protocol burn a ton of unnecessary money on poor execution of their gov token buyback. No one wants the protocol to waste money making a poor trade. Everyone that holds FXS gets equally hurt in that situation. As an FXS holder, you do not care about the immediate price impact of the FXS buyback. What you should care about is the highest amount of FXS tokens bought back per $ of profit spent. That's how the most value is returned to FXS holders.

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Ok so question… my understanding of one of the purposes

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