We have great news for ADX holders!
During the period between 01 May 2020 and 05 October 2020, we bought back a total of approximately 6 million ADX using funds from the AdEx treasury.
Inspired by the buyback-and-make model, we've decided to utilize those funds on public liquidity pools such as Uniswap and Balancer, but not use them for staking or governance.
The buyback was executed OTC (1,810,010 ADX) and on Binance and Huobi using only limit maker orders to ensure there's no sudden impact on the price. The weighted average purchase price was under $0.16.
All bought back ADX were transferred to adx-buyback.eth - and a million ADX together with the corresponding amount of ETH was already added as liquidity on Uniswap and the LP tokens were transferred to our multisig.
The rest was used to create a Balancer pool of ADX-yUSD with a weight of 70-30 (70% ADX, 30% yUSD): you can see the transaction here.
What this means in practice is that those funds will be constantly utilized to provide liquidity to Uniswap ADX-ETH and Balancer ADX-yUSD markets, therefore decreasing slippage and allowing more efficient trading.
While those ADX are still on the market due to being in liquidity pools, they cannot be sold at will: instead, those tokens participate in automatic market makers which follow a strict bonding curve.
But also, we're backing them up with equivalent amounts of ETH/stablecoins, meaning that there's additional liquidity added in both directions, which ultimately makes ADX markets stronger.
Furthermore, this event ensures that 6 million ADX will not be used for governance through validator staking, which increases the relative participation share of ADX holders.
Yes! From now, buybacks can be executed by using Balancer or Uniswap directly, to enhance the transparent nature of such events.
Furthermore, this paves the way for an automatic buyback machine that uses the Balancer pool, as described in the buyback-and-make article.