OpenSwap Troll Talks: Chapter #13 — Buyback Queue (Vo1. 1)
- OpenSwap’s newest technology, Buyback Queue- a part of the Booster Queue feature that allows projects to carry out token buybacks
By the time this Troll Talks chapter is issued, we would have already announced Impossible Finance as the first token project to utilize our Booster Queue. Are you guys excited?
Before we announce the rest of the first cohort of OpenSwap Booster Queue, and to get you Trolls even more hyped, why don’t we have a look at how we think Buyback Queue can address the ongoing issues and uncertainties with token sale, and the basics to how Buyback Queue technology works.
Issues with Traditional Token Sales
At OpenSwap we understand DeFi users’ psychology. Warranties and money-back guarantees provide users with confidence to make purchases and ultimately build trust with a token project. Simultaneously, it incentivizes the project owners to raise standards and increase the quality of their DeFi offerings to ensure that such warranties and guarantees are not acted upon. Both activities ultimately lead to stronger crypto ecosystems.
In today’s DeFi environment, there is no shortage of anonymous projects, rug-pulls, and hacking attacks, DeFi participants are increasingly wary of new and upcoming projects, often to the detriment of the ecosystem as a whole. The introduction of Buyback Queue can help investors mitigate exposure to potential uncertainty of anonymous projects, rug pulls, and hacking attacks. Buyback Queue is an integral technology that compliments the OpenSwap Booster Queue feature, without it, this mechanism may not work as efficiently.
The Basics of Buyback Queue
Buyback Queue is a godsend technology and a key elemental differentiator making our Booster Queue offering one of a kind. It allows token projects to drastically boost the confidence of investors by guaranteeing buybacks limiting their investment risks to an absolute minimum. This makes OpenSwap very different from conventional private token sales facilitators where investors will need to bear 100% of the associated risks.
There are a few important parameters for the Buyback Queue:
- Buyback price and collateral needed
A token project would need to preset the buyback price at. Normally, it would be lower than the market price or the sales price. They would dictate the amount of collateral needed. Typically, the amount of collateral needed is 125% of the token sales amount.
2. Collateral composite
As of the moment, the collateral composition would be made of 25% of BUSD from the proceedings of the Sales Queue and the rest would be made from 100% of project tokens.
There is also a liquidation contract governing this process, and there will be different scenarios that may trigger the liquidation contract. This will be elaborated in Troll Talks: Buyback Queue Vol. 2 🚀
With the rollout of OpenSwap Booster Queue and Buyback Queue, many VCs, token projects, and launchpad partners already expressed excitement about the possibilities of being able to carry out investments through these offering, and OpenSwap will continue to develop and improve these features in the coming months with an aim to provide our partners and investors the means of buyback protection programs that can ultimately reduce the risk of investing in early stage project.
In the upcoming volumes of Troll Talks Buyback Queue, we will take a deeper dive into the Buyback Queue technology, the fees involved with this offering, as well as other core concepts including the governance side of things, Buyback period, collateralization mechanism, collateralization activation scenarios, and the asset collateralization types.
OpenSwap is the world’s first DEX providing on-chain swaps at zero slippage with hybrid smart routing, and a single asset crosschain bridge. As the DeFi universe continues to expand, liquidity becomes increasingly scattered across multiple chains and the situation is poised to get worse as new chains emerge with individual DEXs on each chain. The OpenSwap team has been working for the past several months on building up a vision of a greater OpenSwap ecosystem that will become every crypto project’s BFF through a set of key offerings that will empower teams to establish funding and sustained token health, allowing teams to focus on what they do best — BUIDLing.
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