BitDAO Considers Buying Back $100 Million in BIT Tokens
BitDAO, the decentralized autonomous organization backed by Bybit, is evaluating a proposal to buy back $100 million worth of its own BIT tokens.
On December 19, a new proposal was submitted to BitDAO, recommending the allocation of 100 million USDT to repurchase BIT tokens from the market. The buyback process will span 50 days, starting January 1, 2023, with a daily expenditure of $2 million.
This proposal updates the “BIT Purchase Program” discussed in BIP-9 and BIP-12 proposals since May of this year.
(1/3) [DISCUSSION] $BIT Purchase Program, Update Jan 2023
— BitDAO (now Mantle) (@BitDAO_Official) December 19, 2022
This soft proposal is a parameter update to BIP-9: $BIT Purchase Program and BIP-12.
✅ Set the Target Daily Purchase Amount (TDPA) at $2.0M USDT per day starting Jan 1, 2023 for 50 days (total $100M USDT)
The proposal, put forward by a member with the handle “cateatpeanut,” outlines the following key reasons:
- Boost internal capital, including:
- Core product: BIT tokens
- Secondary products: Swap activities, investment operations, and profit strategies.
- Utilize excess capital to return value to holders through distribution or buybacks.
- After buying back $100 million in BIT tokens, BitDAO's treasury will retain 300 million USDT/USDC and 270,000 ETH (~$345 million), sufficient to fund over five years of BIT development.
- The current BIT price is attractive, especially with the upcoming layer-2 network project Mantle on Ethereum.
Launched in 2021 and supported by cryptocurrency exchange Bybit, BitDAO stands out from other DAOs that focus on DeFi protocols. Instead, BitDAO's investment strategy aims to support web3 research and development through seed funding grants.
As reported by Coin68, BitDAO is also beginning to develop its own projects, with plans to launch an Ethereum layer-2 network named Mantle in 2023. This network promises superior performance compared to existing networks, with faster speeds and lower costs.
BitDAO holds the second-largest DAO treasury after Uniswap. The buyback funds will come from the organization's $1.7 billion treasury, half of which consists of BIT tokens. If the proposal is approved, BitDAO’s BIT holdings will incrementally increase according to the planned buyback over the 50-day period.
DAOs with native tokens making up a significant portion of their reserve assets, like BitDAO, have faced substantial declines this year. To address this, DAOs are seeking to diversify their treasuries by increasing stablecoin holdings and investing in low-risk real-world assets such as U.S. Treasury securities.
BIT is currently trading at $0.29.
Price Movement of BitDAO (BIT) Over the Last 7 Days
Screenshot from CoinMarketCap on the evening of December 20, 2022
