RTIP-1: $RAGE Buyback and Burn

Proposal:

Allocate $2M USDC of Rage Treasury to HLP. Each epoch (2 weeks), use 60% of accrued yield to buyback and burn $RAGE. All buybacks will take place using Hyperliquid TWAPs. If the value of the LP position is ever below the original principal, then no buybacks will take place till the LP position recovers its principal value. The remaining 40% will be auto-compounded into HLP.

Procedure and Considerations:

1. LP position will be held by EOAs (since HLP is not multisig compatible)
2. HLP position will be divided among 3 EOAs to avoid single point of failure
3. Accrued yield will be manually calculated / published each epoch
4. Hyperliquid TWAPs will be used to buyback $RAGE
5. Re-purchased $RAGE will be sent to burn address (0x0000000000000000000000000000000000000000)

Risks:

1. HLP may be loss making
2. Hyperliquid L1 may experience downtime (leading to losses in HLP)
3. EOAs are required to deposit into HLP

Backtest:

We have conducted a backtest of HLP over the last year, with the following results

• Duration: May 10, 2023 - Aug 12, 2024 (15 months)
• Original Principal: $2M
• Total Yield: $1.96M
• Buyback Amount: $1.3M
• Final Yield after Buyback: $656k
• Final Principal: $2.656M
• Net Return after Buyback: 32.8%

Disclaimer:

• Anyone can vote on this proposal, but the final vote count will be weighted by each voter's $RAGE token balance on Hyperliquid L1.
• The vote count displayed on the UI may not reflect the true outcome.
• We will calculate the weighted votes off-chain and share the final results on Discord and Twitter after the 7-day voting period ends.