Summary
This proposal outlines a continual strategy to utilize the Treasury Income from dForce Protocol to purchase USX tokens in the market, which will then be distributed to the USX depositors and contribute to its yield.
Rationale
The dForce Protocol is a decentralized stablecoin and lending protocol that allows users to lend and borrow assets and allows users to mint USX stablecoin. The income from the protocol is distributed to the treasury, which currently is not being used.
The purchase of USX tokens by the treasury and the subsequent distribution of the tokens to the USX depositors will help to increase the demand for USX tokens and will provide additional incentives for users to lend and borrow on the USX Protocol.
Sources of Protocol Income
The dForce protocol income comprises of the following components:
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dForce Lending interest reserve;
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USX interest charge;
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LSR deposit yield and liquidity mining rewards;
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protocol-own assets yields (i.e., from 3rd party protocol income)
Strategy
We propose to implement a strategy to use the Treasury income periodically to purchase USX tokens on the open market.
The purchased USX tokens will be pooled then be distributed to the USX depositors in proportion to the amount of USX tokens they have deposited in the dForce Protocol.
This will help to increase the demand for USX tokens and should also help to increase the lending activities on the USX Protocol.
Conclusion
The proposed plan of using the treasury income to purchase USX tokens in the market and then distributing them to USX depositors is a sound strategy for increasing the demand for USX tokens and encouraging more users to lend and borrow on the USX Protocol. This should result in increased liquidity and an overall healthier USX ecosystem.