Summary

This proposal presents the Sonne Finance community with an opportunity to enhance the transparency and efficiency of our SONNE token buyback and staking reward distribution strategy. Currently, we face challenges with our scheduled token buybacks being exploited by other market participants. These actors buy tokens in anticipation of our buybacks, leading to unfavorable market conditions for us.

Abstract

We propose three potential strategies for future buybacks and reward distribution:

1-Fully randomizing revenue distribution:

Under this approach, we would perform the reduction in reserves to send the revenue to an EOA (Externally Owned Account), but delay the buyback to random times and amounts. This would make it more difficult for external parties to anticipate and exploit our actions.

2-Team distribution of sSONNE rewards:

In this strategy, the Sonne Finance team would distribute rewards from team funds and retain the USDC as team treasury, performing the buyback at their discretion. This would ensure timely distribution of rewards but introduces an additional element of trust towards the team.

3-Maintain status quo:

The final option would be to continue our current strategy, despite its known vulnerabilities.

Motivation

The existing buyback schedule exposes Sonne Finance to potential market manipulation and front-running, reducing the effectiveness of our strategy and potentially impacting the value returned to our stakers. By updating our strategy, we aim to preserve the value of the SONNE token and ensure that our stakers receive fair rewards.

Voting Options

1) Yes - Implement Randomized Buybacks

2) Yes - Implement Team Distribution

3) No - Maintain Status Quo

4) Abstain

Technical Specifications

If the community decides to adopt either the Randomized Buybacks or Team Distribution strategy, necessary changes to our smart contracts and reward distribution systems will be required. We will work with our development team to ensure these changes are made swiftly and securely.

Closing

This proposal aims to improve the fairness and effectiveness of our SONNE buyback and staking reward distribution strategy. We look forward to receiving your feedback and hearing your thoughts on our proposed changes.