Token Buybacks
The same LBP mechanism can be used to support accumulation - buying the project token.
Mental Model
For DAOs and treasuries, buying back a large amount of a token can be challenging - market buys can create abrupt price impact. An LBP buyback configuration approaches this differently: it uses a scheduled weight shift to create a rising bid, and lets arbitrage keep the pool price aligned with external markets.
Configuration
1. Token Setup
- Reserve token: The asset the Treasury wishes to spend (e.g., USDC, WETH).
- Project token: The asset the Treasury wishes to acquire.
2. Weight Schedule
The weight curve should start with the reserve token dominant.
| Parameter | Example value | Reason |
|---|---|---|
| Start weights | 90% reserve token / 10% project token | Keeps the initial bid low. |
| End weights | 30% reserve token / 70% project token | Allows the bid to rise over time. |
3. Swap Permissions
Ensure that blockProjectTokenSwapsIn is set to false. The mechanism relies on external actors swapping the project token in to the pool to extract the reserve token.