Introduction

Orderly is at a turning point. We’ve already paused trading incentives, restructured emissions-heavy flows, and rolled out new products like Omnivaults.

The next step is to upgrade how protocol revenue flows back to the community. The current system pays stakers in USDC, but this is idle capital that doesn’t support ORDER’s value or align long-term incentives.

This proposal introduces a simpler, more sustainable model: redirect protocol fees to recurring ORDER buybacks, allocating a share to reward stakers in esORDER, and the remaining to a community-governed wallet.

The Proposal

We propose that up to 60% of Orderly net fees** are redirected toward recurring buybacks of ORDER, executed via TWAP using the previous two weeks of revenue. This creates a consistent and programmatic demand for ORDER.

The tokens purchased through buybacks will be split evenly:

• 50% will go to stakers, distributed as esORDER (with a 3-months linear vesting)

• 50% will go to a community-governed wallet, in the form of ORDER. The ultimate purpose of these tokens (burning, liquidity bootstrapping, incentives, or other initiatives) will be determined through separate governance votes in the coming weeks.

With this proposal, the current USDC-based staking system will be retired. Stakers will be able to claim their share of the existing USDC treasury directly, retaining full flexibility on how to use those funds (deposit them into the Omnivault, hold them, or redeploy them elsewhere). This simplifies implementation and avoids the complexity of managing multiple treasuries, while still preserving staker rights.

The VALOR mechanism will also evolve. Once USDC rewards are halted, the current VALOR tied to them will be phased out and replaced with a new VALOR mechanism linked to esORDER rewards. The transition will be seamless: holders will keep their exact same proportional share.

For example, a staker holding 1% of VALOR today will begin with the same 1% share in the new VALOR system and will accrue 1% of esORDER rewards going forward. This share may change over time as newly issued VALOR is distributed, which could dilute existing holders. Importantly, when a staker claims their portion of the USDC treasury, their old VALOR will be burned, but their equivalent share at the start of the new VALOR system will remain intact, ensuring that all rights are preserved in the transition.

Together, these changes ensure that staking remains meaningful, ORDER gains consistent support through buybacks, and the community retains both flexibility and direct governance power over protocol-owned assets.

** Buyback amounts and the percentage of net fees allocated may vary over time and are subject to governance adjustments.

Rationale

This model balances the three priorities expressed in community feedback:

• Maintain staking utility – Stakers continue receiving rewards and governance rights.

• Support ORDER value – Recurring buybacks create consistent demand.

• Preserve VALOR rights – Existing holders retain their allocations in the new system.

The added benefit is simplicity: instead of managing multiple treasuries and auto-deposits, stakers have full flexibility, and Product avoids unnecessary delays.

Next Steps & Voting

If approved, the following will happen:

• Pause USDC rewards and transition VALOR to the new esORDER-linked system.

• Enable revenue-backed ORDER buybacks.

• Create the community-governed wallet for purchased ORDER.

• While Product implements the technical changes for this transition, a separate Snapshot vote will be held in parallel to decide the use of the community-governed wallet tokens (e.g., burn, incentives, liquidity).

Voting Parameters

• Quorum: 30% of total voting power

• Voting Period: 7 days

• Eligibility: Only ORDER staked before proposal submission counts toward voting power.

The Takeaway

This proposal introduces a smarter revenue loop:

• ORDER demand is reinforced by buybacks.

• Stakers retain utility through esORDER rewards.

• The community gains governance over a growing ORDER treasury.

It’s lean, sustainable, and positions Orderly for long-term growth while respecting community feedback.