What percentage of revenue is used for token buyback?

Hi,

I’m new and looking into investing in the token. I heard of you guys, did some basic reading, watched videos, looked up on social media, looked up the founder etc. So did the very basic research so far and the project looks really promising to me. I was actually stunned by the revenue numbers but found out that no revenue is shared by the stakers, I guess mostly to escape regulation and token is bought back with portions of the revenue instead, which is pretty cool.
So my question is, could you give some exact numbers? Exactly what percentage of revenue is used for buybacks?

Thank you so much.
Osman

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Thanks for your interest and research into CoW Protocol, Osman.

You’re right, the revenue numbers are impressive! However, it’s important to understand them in the full context: The protocol has significant operational expenses, primarily:

  • Solver incentives (paying the solvers who find the best trades)
  • Gas costs for executing trades
  • Ongoing development and protocol improvements

Currently, the DAO treasury uses a portion of revenue to buy back COW tokens specifically for solver incentives, which effectively makes COW token issuance/burn net neutral. The remaining revenue is retained in the treasury to ensure protocol sustainability and fund future growth initiatives.

Regarding your question about exact buyback percentages - while there isn’t a fixed percentage, the buybacks are dynamically adjusted based on solver incentive requirements. The focus is on maintaining protocol sustainability while building a strong treasury reserve for long-term development.

I personally believe that once the DAO treasury reaches sufficient capitalization to ensure long-term runway and growth, it would make sense to consider increasing buybacks or introducing additional mechanisms for token holders to benefit from protocol revenue. However, this would need to be proposed and decided through proper governance processes.

Let me know if you have any other questions

2 Likes

Thanks middleway.eth, I’m curious. What does ‘the DAO treasury reaches sufficient capitalization’ roughly means to you?

And do you foresee this buyback mechanism as a flywheel to incentivize COW price?

Thanks for the reply!