[EXAIP-25] Buyback of EXA Tokens

Proposal ID: EXAIP-25 Proposer: Exa Labs Date: June 11, 2025

Summary

This proposal authorizes the Exactly DAO Treasury to buy back up to 122k EXA from the EXA/WETH Velodrome Pool during 2025. These tokens were originally distributed as incentives to Velodrome voters to assign VELO emissions to the EXA/WETH pool between July 2023 and February 2025.

The buyback proposal will be executed weekly, using assets in the DAO’s Treasury Multisig and Savings Account.

Context

Between July 2023 and February 2025, the Exactly Treasury distributed 332k EXA to voters on Velodrome to incentivize VELO emissions toward the EXA/WETH pool. Over 65% of those incentives were regularly swapped to VELO by voters. However, 122k EXA accumulated in the Velodrome Velo Maxi Relay AutoCompounder vault and remained unclaimed.

On June 11, 2025, a user executed a full swap of 122,477 EXA in one transaction using the permissionless function "swapTokenToVELOWithOptionalRoute" in the Velo Maxi Relay AutoCompounder vault during a narrow time window on Wednesday, June 11, 2025.

Velodrome official statement https://x.com/VelodromeFi/status/1932886658082615769

This griefing attack effectively dumped the entire amount into the pair EXA/WETH to get MEV profit (Velodrome estimates $80k for all their pools). Transaction link

Treasury Fees and Funding Source

Exactly Protocol earns revenue through interest payments made by borrowers. The protocol retains a portion of these interest payments as a Treasury Fee.

• The Treasury Fee is currently set at 20%, meaning that for every $100 paid in interest by borrowers, $20 goes to the DAO Treasury.
  Reference

• Under the current staking program:

  • 50% of Treasury fees go to EXA stakers
  • The remaining 50% go to the DAO Savings Account

Initially, the buybacks will use funds from the DAO’s operational treasury, which includes:

• Around 11k USDC in the DAO Savings Account https://debank.com/profile/0x8a1c05C4462b3554814a637E940b3342ffBE02f2
• Around 13k USDC equivalent in different tokens held by the DAO Treasury Multisig https://debank.com/profile/0x23fd464e0b0ee21cedeb929b19cabf9bd5215019
• The ongoing Treasury Fees received in the Savings Account until the end of 2025.

Implementation

• Authorize the DAO Treasury multisig to buyback up to 122k EXA from EXA/WETH Velodrome pool during 2025.
• Buybacks will be executed weekly.
• Purchases will be discretionary and based on available liquidity and market conditions.
• Acquired EXA will be held in the Treasury multisig for future DAO-aligned use.

Conclusion

This proposal offers a pragmatic response to the unintended sale of 122k EXA from the Velodrome vault, while taking a conservative approach to treasury management. The DAO can gradually reacquire these tokens over time using only operating funds. The buyback will help restore a portion of the EXA that was originally allocated to incentivize liquidity and voter alignment, and ensure the DAO maintains a healthy reserve of its native token for future initiatives.