RIP #11 - Utilizing Expired dLP for mDLP Buyback

Abstract

This proposal seeks approval to utilize expired dLP to buy back up to 20% of the total mDLP supply over the course of one year. The primary objective is to stabilize and enhance the mDLP/dLP peg by burning some mDLP and staking the rest to generate yield. This proposal replaces the previously announced redeem vault strategy.

Motivation

The primary motivation for this proposal is to ensure the stability and value of mDLP within the Radpie ecosystem. By using expired dLP to buy back mDLP, we aim to maintain a 1:1 peg between mDLP and Radpie's underlying locked dLP. Burning a portion of the bought-back mDLP will help in aligning the supply with the available dLP, thereby supporting the token's value. Additionally, staking the remaining mDLP in the treasury will generate yield, further supporting the peg and benefiting the ecosystem. This approach aligns with our strategic goal of enhancing the value and stability of our tokens while optimizing the use of expired assets.

Specification

Utilize expired dLP to buy back up to 20% of the total mDLP supply, burn the portion necessary to ensure a 1:1 peg with underlying locked dLP, and stake the remaining mDLP in the treasury to generate yield. If the buyback reaches 20% of the total mDLP supply, any remaining expired dLP will be relocked.

For example, if we use 50 expired dLP and buy back 80 mDLP, we will burn 50 mDLP to maintain the 1:1 peg and stake the remaining 30 mDLP in the treasury to generate yield, which will be used to buy back more mDLP to further support the peg.