Updated Proposal: Incentivising long-term xDG holding

Background

The DG ecosystem is growing exponentially with 183k MAU (up from just 24k in Oct, 79k in Nov, and 127k in Dec), ICE Poker is the #1 P2E game by monthly revenue, and the DG Treasury has $58m in it’s treasury, implying ~$230m of annualized revenue. Despite these strong operational and financial gains for the business over the last few months, $DG’s market cap is 25% lower than where it was in November, and flat to where it was in December. $DG is considerably undervalued, with a market cap of just $124m. Most of the assets in the ecosystem are highly correlated to broader crypto markets; this has been the impetus in hedging the treasury balance from a market downturn by beginning to move mint proceeds into DAI and USDC. As macro headwinds will likely continue to weigh on crypto markets in the near-term, it is also important to reduce the correlation of $DG to broader crypto market movements. Instead, we should aim to increase $DG's correlation to the operational and financial success of the DG ecosystem.

Proposal

Use mint proceeds from every other ETH mint to purchase DG and put into governance pool so xDG appreciates vs DG. Assuming 1 ICE mint per month, and 1 ETH mint per month, this would imply mint proceeds from 6 ETH mints per year would be used to purchase DG and put in governance pool, and mint proceeds from the other 6 ETH mints per year would be up to the discretion of the team.

Rationale

(1) Incentivise long-term holding of xDG.
(2) Align xDG tokenholders to the financial success of the business (3) Increase correlation of DG’s token price to the success of mints

This would increase the yield earned by holding xDG, align xDG tokenholders with the success of the business, and increase upward price pressure on DG.