Frax Finance’s founder, Sam Kazemian, enthusiastically supports a proposal from Ouroboros Capital advocating for a more proactive token buyback approach.
Frax Share (FXS) is renowned for its current buyback strategy, whereby the project repurchases and eliminates the same amount of FXS within a predetermined timeframe, regardless of price fluctuations. The project has allocated a $20 million fund for this purpose.
On June 16, Ouroboros Capital, a cryptocurrency investment research firm, submitted a proposal calling for a time-weighted average price (TWAP) buyback worth $1 million to be initiated when the FXS price falls below $5.
If the price further declines below $4, an additional $1 million buyback, scheduled for one month, is suggested to be activated. The fundamental objective behind this proposal is to acquire more FXS tokens for subsequent elimination as the price continues to decline.
Kazemian conveyed his conviction that utilizing the project’s revenue and capital to purchase and eliminate the FXS supply is the most prudent course of action.
He emphasized the favorable conditions for such a strategy, citing the subdued valuations within a mature ecosystem due to macro market conditions and the state of the global economy. In his view, there is no more effective use of capital.
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Kazemian agreed with Ouroboros Capital’s proposal to expedite the TWAP mechanism as the price drops to $2. He asserted that if the price continues to decline, the project should adopt a more assertive approach in buying back tokens.
