Purpose

This proposal establishes a protocol revenue allocation mechanism directing 80% of net fee revenue toward strategic HOME token acquisitions for treasury reserves, implementing Time-Weighted Average Price (TWAP) execution strategies to optimize market operations while maintaining operational safeguards and treasury sustainability.

Motivation

With HOME token circulation established following the June 2025 TGE and governance infrastructure operational under DIP-003, the DAO requires mechanisms to sustainably manage protocol value accrual. Strategic token acquisitions using protocol revenue create alignment between platform growth and token holder interests while building treasury reserves for future strategic initiatives.

Protocol fee revenue across EVM networks and Solana provides sustainable funding for treasury operations. Allocating the majority of net revenue (after operational costs) toward HOME acquisitions demonstrates commitment to long-term value accrual while maintaining flexibility for future treasury deployment.

Rationale

The proposed 80% revenue allocation for HOME token acquisitions balances aggressive treasury building with operational sustainability. By retaining acquired tokens in treasury reserves rather than removing them from circulation, the DAO maintains strategic flexibility for future initiatives.

TWAP execution strategies minimize market impact while ensuring consistent acquisition patterns aligned with protocol revenue cycles. This approach mirrors successful implementations by leading DeFi protocols, particularly those demonstrating sustainable treasury growth through disciplined acquisition strategies.

Key Terms

Net Fee Revenue: Protocol fee capture across all supported networks minus operational costs including paymaster fees (as managed by ZeroDev for EVM and an internally-developed solution for Solana).

TWAP (Time-Weighted Average Price): Algorithmic execution strategy that distributes purchases across defined time periods to minimize price impact and achieve average market pricing.

Treasury Reserves: DAO-controlled multi-signature wallets containing protocol assets including acquired HOME tokens.

Minimum Operational Runway: Treasury threshold below which buyback operations pause to ensure protocol sustainability.

Specifications

Technical Requirements

Revenue Allocation Framework

Buyback Allocation: 80% of net protocol fee revenue directed to HOME token acquisitions Operational Reserve: 20% retained for ongoing protocol operations and development

Revenue Sources:

• EVM network fee capture (minus paymaster costs)
• Solana fee capture (minus paymaster costs)
• Perpetuals trading fee (1 basis point on notional volume)
• Future protocol revenue streams as implemented

Execution Strategy

TWAP Implementation:

• Weekly execution cycles aligned with revenue collection periods
• Maximum 2% price impact per execution period
• Distributed purchases across 24-hour windows minimum
• Automated execution through sophisticated market makers or approved DEX aggregators

Supported Venues:

• Market makers, centralized exchanges or native chain DEXs with deepest HOME liquidity.

Implementation Details

Operational Authority

The Executive Operations Working Group maintains authority for:

• Buyback execution within approved parameters
• Selection of execution venues and timing
• Treasury management of acquired tokens
• Operational reporting to the DAO

Safeguard Mechanisms

Minimum Treasury Threshold: Buyback operations automatically pause when total treasury value falls below $2,000,000 USD equivalent to ensure minimum 6-month operational runway.

Emergency Override: The DAO Council retains authority to pause buyback operations through expedited 24-hour governance vote for:

• Critical security incidents
• Regulatory compliance requirements
• Force majeure events affecting protocol operations

Acquired Token Management

All HOME tokens acquired through this mechanism are:

• Retained in DAO treasury multisig wallets
• Available for future strategic deployment via governance
• Not removed from circulation or destroyed

Affected Systems

• Protocol fee collection infrastructure across all networks
• Treasury multi-signature operations
• Automated execution infrastructure for TWAP operations

Steps to Implement

1. TWAP Infrastructure Deployment Deploy & test market maker TWAP execution.

   • Resources Required: Technical implementation, security review
   • Timeline: 10 days from DIP approval

2. Initial Execution Begin buyback operations with conservative parameters for first epoch.

   • Resources Required: Allocated revenue, execution monitoring
   • Timeline: Following infrastructure deployment

Timeline

Phase 1: Infrastructure Setup - Day 1 to Day 10
Phase 2: Operational Framework - Day 5 to Day 12
Phase 3: Launch Execution - Day 15

Total Implementation Time: 15 days from approval

Budget Breakdown

Category	Cost	Description
Operations	Ongoing 20% of revenue	Reserved for protocol operations

Risk Assessment

Technical Risks

Execution Risk: TWAP algorithms may face adverse selection during volatile markets. Mitigation through conservative impact thresholds and manual override capabilities.

Financial Risks

Liquidity Risk: Large acquisitions relative to available liquidity may cause excessive slippage. Mitigation through impact limits and extended execution windows.

Treasury Risk: Concentrated HOME exposure could affect operational flexibility. Mitigation through minimum reserve thresholds and diverse treasury assets.

Operational Risks

Revenue Volatility: Protocol fee income may fluctuate significantly. Mitigation through percentage-based allocation rather than fixed amounts.

Legal and Compliance Considerations

This buyback mechanism constitutes strategic treasury management rather than profit distribution, maintaining clear distinction from traditional equity buyback programs. Acquired tokens remain protocol assets available for ecosystem development, liquidity provisioning, and strategic initiatives as determined by future governance.

The mechanism operates as automated treasury allocation based on predetermined parameters, avoiding discretionary trading decisions. All operations execute through decentralized venues without preferential treatment or insider information, maintaining compliance with the DAO's decentralized operational framework.

Reporting and transparency requirements ensure community visibility while avoiding language or structures that could be construed as dividend-like distributions or investment returns. The Executive Operations Working Group maintains responsibility for ongoing compliance review as regulatory frameworks evolve.