[BIP:99] Fair Value Buybacks

TL;DR: Grant approval for the Treasury Council to conduct discretionary buybacks of BIFI with treasury assets where the price of BIFI falls below its "fair value".

Background

On 21 April 2026, the market capitalisation of Beefy’s $BIFI token fell beneath what the Treasury Council considers its "fair value".

When the governance rights to a business (and its underlying assets) trade at a discount to those assets, the business can be considered undervalued, since every $1 spent on governance rights provides proportional entitlement to more than $1 of business assets.

In these situations, buybacks are a common mechanism for the business's treasury to profit by reducing its circulating supply by more than the cost in treasury assets, thereby increasing the amount of treasury assets per circulating token. Buybacks conducted on the market also help to arbitrage the price back to a fair level, protecting holders' ability to exit.

Though caution should be exercised when trading a project's own governance token, well-managed buybacks can be a significant source of value for tokenholders.

Fair Value

At the heart of any successful buyback program is a clear understanding of the value of the asset being purchased and the business assets that sit behind it. Assets recognised on a business's balance sheet at a given value will not necessarily realise that full value if the business were to sell them today.

In this proposal, we define the "fair value" of BIFI as the amount of assets that Beefy DAO could reasonably be expected to receive if it successfully liquidated all of its available treasury assets and settled all of its ongoing payment obligations, divided by the remaining circulating supply.

While some holders may adopt as a rough proxy the current value of Beefy's treasury and the fixed total supply of 80,000 BIFI to calculate "fair value”, we argue that a number of other factors need to be considered to ensure that buybacks are conducted at a “fair value” without disposing of treasury assets at below their worth. After adjustment for these items, we consider that the "fair value" of BIFI is lower than a simple division of treasury amongst total supply.

The Treasury Council's definition of "fair value" includes adjustments for:

• The removal of all BIFI supply held in treasury from both the value of treasury assets and the circulating supply of BIFI;
• The fulfilment of all ongoing payment obligations, on the assumption that Beefy cannot breach and must fulfil these obligations before buybacks can be considered;
• The cost of labour, gas and any service provider fees (including legal fees) that may be incurred in the process of liquidating treasury assets;
• The impact of realising and unwinding treasury DeFi positions, including the value of impermanent loss;
• The time value and price risk associated with unwinding Beefy's fixed assets (i.e. validators) which cannot be immediately liquidated; and
• The price risk associated with the time period between the beginning and end of any liquidation process.

Through this proposal, the Treasury Council seeks the DAO's endorsement of this methodology to ensure a safe margin is maintained when calculating "fair value”, preventing the DAO's assets from being deployed for buybacks at uneconomic prices derived from less-informed calculations.

The Treasury Council will then routinely conduct this analysis in private to assess whether or not to perform buybacks at a given time. Though we intend to establish a routine to ensure consistent helpful action where the price is below “fair value”, the precise details should be kept vague to avoid the risk of manipulation.

Buybacks

This proposal seeks new discretion for the DAO's Treasury Council to conduct buybacks at any price under the "fair value" of BIFI, according to its own assessments.

The Treasury Council would retain full discretion over the amount, pace and means of conducting buybacks, so as to avoid the risk of manipulation. For example, automated buybacks are currently undertaken by the BIFI Vault at fixed weekly intervals; directing a large increase in buybacks through this mechanism would create a predictable trading event that sophisticated traders could exploit. This program would maintain the BIFI Vault's buyback program as before, but ensure that any further buybacks over this level are conducted privately, minimising the opportunity for exploitation.

The Treasury Council also considers it prudent not to impose artificial limits in terms of the amount, pace or price levels of the buybacks. The current dynamics around the BIFI price and Beefy's financial performance leave the future of market activities somewhat unpredictable. Imposing artificial constraints would run the risk of leaving the Treasury Council in a bind where it becomes impossible to meet constraints while continuing to operate as normal.

Despite the absence of formal limits, the Treasury Council commits that buybacks will not (i) occur above the "fair value" of BIFI, (ii) cause unreasonable price disruption, (iii) leave inadequate market liquidity for BIFI, or (iv) deplete the working capital necessary for Beefy's continued operations.

The principle of the buybacks should be that Beefy only seeks to acquire tokens at clearly less than "fair value" to ensure these are profitable for other holders, but not that Beefy must undertake buybacks where BIFI trades at below "fair value”. While the Treasury Council intends to exercise this power promptly when the opportunity presents itself, this proposal does not constitute a commitment regarding the timing, size, price, or market impact of any buyback. Tokenholders should not rely on the existence of this program as an assurance of price support or liquidity provision.

The Treasury Council is happy to maintain an open dialogue with the community around ongoing buybacks. However, disclosure of buybacks would only be mandated for the subsequent financial report relating to the quarter in which the buybacks take place. For instance, buybacks conducted in January may not be disclosed until the Q1 financial report, which could be published as late as June of the same year.

Treasury BIFI

The treatment of BIFI returned to treasury by buybacks is important to ensure that value is preserved. If this proposal is approved, the Treasury Council intends to treat the BIFI bought back under this program as non-circulating (with the exception of treasury BIFI that may be needed to sustain sufficient market liquidity).

The Treasury Council intends that any other uses of BIFI bought back by the treasury will be limited, and should generally be approved by a further DAO governance proposal. The Treasury Council will not sell BIFI, use it for payment with contributors or suppliers, or distribute it as user incentives or tokenholder rewards without first going through the proper governance channels.

This commitment helps to assure that any buybacks do properly decrease the circulating supply, and do result in a net increase in the amount of "fair value" assets per circulating token.

Proposal

The Treasury Council should be granted immediate powers to undertake discretionary buybacks of the BIFI token at prices lower than the Council's estimate of the token's "fair value”.