Buyback and burn
Every Cru token has its own buyback vault. ETH that nobody is owed collects there, and after graduation it buys the token back from its pool in small steps and burns what it buys.
What fills the vault
All of the following go into the vault of the token they came from:
- Sold crew positions. After graduation, the crew share that belonged to tokens their holders have since sold or transferred.
- Forfeited rewards. The unclaimed rewards a crew member or the creator gives up when they sell or transfer crew tokens.
- A skipped creator buy. The whole creator share of every trade, when the creator did not make a creator buy of at least 0.05 ETH. Also the part of the creator share the creator gave up by selling.
- Trades with no crew. The crew share of any trade made while nobody holds crew tokens, such as a token's very first curve buy.
- Rounding leftovers at graduation. Any tiny amount of ETH left over when the pool is funded.
The vault fills from the first trade, but it can only be spent once the token has graduated and has a pool to buy from.
How a buyback runs
| Rule | Value |
|---|---|
| How often | At most once every 10 minutes per token |
| Size of each buyback | 1/12 of the ETH in the vault |
| Price cap | Stops once the price has risen 1% |
| What happens to the tokens | All burned, so the supply goes down |
| Trading fee | None on buybacks |
| Tip for running it | 0.5% of the ETH spent, paid from the vault |
- Anyone can run a due buyback. When one is due, the token page shows a Run buyback button, and whoever sends the transaction receives the tip.
- Small steps keep it steady. Each buyback spends a twelfth of what is in the vault, so a large vault is spent over many buybacks. If the price cap is reached first, the rest stays in the vault for the next one.
- The price cap limits front-running. A buyback can move the price by at most 1%, while a trader who buys just before it and sells just after pays the 1% fee on both trades.
A worked example
- First buyback spends 1/12
- 0.1 ETH
- Tip to whoever ran it, 0.5%
- 0.0005 ETH
- Left in the vault
- 1.0995 ETH
- Next buyback, at least 10 minutes later
- About 0.0916 ETH
Each buyback is a little smaller than the one before, unless new ETH has come into the vault in the meantime.
Burned for good
Tokens bought back are destroyed. They leave the supply permanently, so every token still held is a slightly larger part of what remains. The token page shows how many tokens have been burned so far, how much ETH is in the vault, and when the next buyback is due.
The vault of a token that never graduates is never spent. That ETH stays locked in the Cru contract for good. See Graduation.