TL;DR:

• Staker rewards stay exactly the same (30% of net fees as esORDER).
• The community-governed wallet is retired and its 3.25M ORDER tokens burned.
• The protocol retains more revenue to invest in growth.

Introduction

Since passing Proposal #2, Orderly has been executing recurring ORDER buybacks funded by 60% of net fees. Half of those buybacks go to stakers as esORDER, and the other half accumulate in a community-governed wallet.

This proposal makes a straightforward change: we retire the community-governed wallet (0xb154de8a6d6377b028612d4d7942ca8771c4b839), burn the tokens it holds (3,253,523.6097 ORDER), and reduce the buyback allocation from 60% to 30% of net fees. Staker rewards are unaffected, the effective share going to stakers remains 30% of net fees, exactly as it is today.

The 30% of net fees previously allocated to the community wallet is redirected back to the protocol. The competitive landscape for onchain perpetuals is consolidating fast, and Orderly needs to invest aggressively in product, integrations, and go-to-market to close the gap. This is a reallocation of resources from an idle wallet to active growth.

The Proposal

• Reduce the buyback allocation from 60% to 30% of Orderly net fees.
• Direct 100% of purchased ORDER to stakers as esORDER with the existing 3-month linear vesting. Stakers receive the same 30% of net fees they receive today, the only difference is the removal of the community wallet split.
• Retire the community-governed wallet. The wallet has accumulated over 3.25M ORDER tokens without a clear deployment path. Rather than continue adding governance overhead, we simplify the system.
• Burn all ORDER currently held in the community-governed wallet, permanently reducing circulating supply.
• The protocol retains 70% of net fees (up from ~40%) for operational needs, product development, and growth.
• The VALOR mechanism, esORDER vesting, and staking infrastructure remain unchanged.

Rationale

1. The community wallet isn't generating value. It was designed to give the community flexibility, but in practice it accumulates tokens without a clear use. Retiring it removes governance overhead and frees up resources that can be deployed immediately.

2. Orderly needs to invest to compete. Volume in onchain perpetuals is growing but consolidating among fewer venues. Orderly's current market share doesn't reflect what we're building. Closing that gap requires capital for product iteration, deeper integrations, and go-to-market. This reallocation funds that directly.

3. Staker economics don't change. This is worth being explicit about. Under Proposal #2, stakers receive 50% of a 60% buyback, effectively 30% of net fees. Under this proposal, stakers receive 100% of a 30% buyback, the same 30% of net fees. No reduction, no change in mechanics, no change in vesting.

4. Burning is the cleanest exit for the wallet. Rather than debating future uses for accumulated tokens, burning them reduces supply permanently and removes ambiguity.

What Changes

Next Steps & Voting

If approved:

• Adjust the buyback allocation to 30% of net fees.
• Route 100% of purchased ORDER to stakers as esORDER.
• Discontinue further allocations to the community-governed wallet.
• Burn all ORDER currently held in the community-governed wallet.

Voting Parameters

• Quorum: 20% of total voting power
• Voting Period: 7 days
• Eligibility: Only ORDER staked before proposal submission counts toward voting power.

The Takeaway

This is a resource reallocation, not a reward reduction. Stakers keep exactly what they earn today. The protocol gains the capital it needs to compete. An idle wallet gets retired and its tokens burned. The system gets simpler.