This proposal is authored by cateatpeanut

The BitDAO forum discussion thread: https://discourse.bitdao.io/t/proposal-bit-purchase-program/1995

Background

The BitDAO Treasury is forecasted to grow via several avenues:

1. Bybit contribution, which is transferred monthly based on the following parameters. The current contribution is composed of 50% ETH and 50%USDT/USDC, see details.
2. Deployment of assets to Autonomous Entities (Game7, zkDAO, EduDAO, etc…), labs, venture/swaps, and yield opportunities. These are long term strategies which aim to achieve a flywheel of growth for the BitDAO Treasury.
3. Growth of project tokens in the BitDAO Treasury.

Purpose

The purpose of the $BIT Purchase Program is to increase the economic connection between BitDAO Treasury growth and the $BIT token.

$BIT Purchase Parameters

1. The “Targeted Daily Purchase Amount (TDPA)” shall initially be set at $700,000 per day (approximately $21M per month).
2. TDPA can be dynamically adjusted pending BitDAO vote:
   • If funds are required for asset deployment opportunities, the TDPA can be decreased, with a lower bound of zero.
   • If the BitDAO Treasury is growing faster than forecasted asset deployment opportunities, the TDPA can be increased.
   • BitDAO voters shall also consider whether the prevailing $BIT price is attractive for purchase.
3. Purchasing shall occur on publicly available secondary markets including CEXs and DEXs.
4. For transparency, the daily purchases shall be executed linearly with a bot.

Phase 1 Purchasing

5. Initial purchases shall be conducted as a component of Bybit’s monthly contributions:
   • Part of the Bybit monthly contribution shall be used to purchase $BIT and then be contributed to the BitDAO Treasury;
   • Phase 1 TDPA will not exceed Bybit’s monthly pledged contribution amount;
   • The remaining pledged contribution amount not used for $BIT purchase purposes shall retain the prevailing contribution asset mix (currently 50% ETH, 50% USDC/USDT).

Option: Phase 2 Purchasing

6. In the future, pending BitDAO vote, a reputable third-party service provider can perform $BIT purchases on behalf of BitDAO, on the condition that all purchasing occurs on publicly available secondary markets (DEXs, CEXs).

Option: Burn

7. In the future, as a separate proposal topic, we can explore the burn of $BIT from the BitDAO Treasury.

Timing

8. Start 2022 June 1st.

Other Considerations

The Targeted Daily Purchase Amount (TDPA) should aim to balance between: 1) the growth of BitDAO Treasury; and 2) opportunities to deploy assets for long-term growth, via: autonomous entities, labs, venture/swaps, and yield.

The recommendation is to be conservative with TDPA at the start, and retain enough treasury assets for the opportunities stated above.