Redirect FXS1559 Burns to Purchase ETH

Author Sam Kazemian

Summary Redirect the 50% of FXS1559 burns to purchase ETH from Uniswap and place it in FXS-ETH LP for 60 days. After 60 days, community can vote to extend this ETH purchase program indefinitely or re-instate burns. This would be a trial run to see how reinvesting AMO profits into the protocol goes.

Abstract If adopted, this proposal seeks to route 50% of the AMO profits that are currently going to burning FXS to purchasing protocol owned ETH for 60 days. The ETH is then continually placed in FXS-ETH LP through an AMO. The LP is not eligible to earn any farming rewards so it would not be competitive in any way with community rewards. Currently there is no FXS rewards for any FXS-ETH pair, but if there was, the FXS-ETH AMO would not be eligible for FXS yields so it would not be competitive with farmers.

Motivation A prior governance proposal created by Justin Bram and Brazy.eth successfully passed to reroute 50% of AMO profits to veFXS holders and was a huge success. This current FXS-ETH proposal was inspired by YFI's similar idea of "own the land on which we operate" posted here: https://gov.yearn.finance/t/own-the-land-eth-on-which-we-operate/10802

I believe reinvesting part of the AMO profits back into the protocol itself could yield just as much of a success if not more. This 60 day trial period is ideal and does not commit to changing the FXS1559 dynamic other than accruing more FXS-ETH liquidity which is a great way to increase FXS value. Additionally, if FXS1559 burns are re-instated, a governance proposal can be made to simply use the accrued ETH to burn the FXS itself which would retroactively create a similar amount of deflationary pressure for FXS if desired. So I believe either way this proposal is a good idea.