How it works
Buybacks and locking
How reserve yield funds buybacks, with locking today and burning planned.
A share of earned reserve yield funds purchases of a market's paired asset. Purchased tokens are currently locked. Burning these tokens is planned for a future update.
How it works
- The reserve earns yield on the USDG backing branded stablecoins.
- That income is split between the protocol, liquidity providers, and buybacks.
- The buyback allocation purchases the paired asset, and the purchased tokens are sent to a lockbox.
See Fees and revenue for how the income is divided.
Locking now, burning later
The current mechanism locks purchased tokens; it does not burn them or reduce the token's reported total supply. A future update is planned to add burning. No release date is set.
Buybacks depend on available yield, liquidity, and execution conditions. They do not guarantee price appreciation or a fixed schedule.