[FIP-1, Fragmetric Improvement Proposal] Token Buyback Program

[Fragmetric]

1. Abstract

Fragmetric introduced FRAG-22, a reward distribution model built on Solana’s token extensions, enabling exclusive NCN partnerships with Switchboard and Ping Network. As a result, fragSOL currently delivers a 7.18% auto-compounded yield. Including rewards from various NCNs, the total effective yield stands at approximately 9.06%, outperforming the market average.

Building on this momentum, this proposal recommends allocating up to 4% of protocol revenue toward purchasing FRAG. This revenue is sourced from staking and Jito (Re)staking rewards. Any revenue generated by future products intended for this purpose will be addressed in a subsequent vote. The primary goal is to support price stability and align incentives across the ecosystem ahead of the upcoming LF(ra)G Campaign seasons.

2. Motivation

Key objectives of this proposal include:

• Introducing sustained buy pressure and added utility for FRAG

• Promote long-term value accrual for FRAG holders

• Reinforce protocol alignment ahead of incentive campaigns

3. Specification

This proposal introduces utility to the FRAG token by allowing FRAG holders to share in a portion of protocol revenue. Specifically, 4% of the revenue generated from Solana staking rewards and Jito (Re)staking rewards (i.e., fragSOL yield) will be allocated to a token buyback mechanism.

By using this share of protocol revenue to purchase FRAG on the open market, the mechanism gradually reduces the circulating supply and applies sustained buy pressure on the token.

If approved, the buyback program will launch within two weeks and be executed on a weekly basis throughout the upcoming LF(ra)G Campaign seasons.

FRAG purchased through this program will either be burned or held in the foundation treasury, depending on ongoing operational assessments and community feedback.

4. Benefits/Risks

Benefits:

• Increased utility and buy pressure for the FRAG tokens.

• Aligns incentives across protocol participants and stakeholders.

Risks:

• Potential for limited short-term impact depending on market conditions.

• Price impact / slippage when buying back FRAG tokens.

5. Conclusion

By leveraging a portion of protocol revenue for targeted FRAG buybacks, this proposal introduces a measured and responsible approach to liquidity enhancement and ecosystem alignment. The program is designed to balance impact with sustainability, serving as an important step toward long-term value growth for the Fragmetric ecosystem.

6. Voting

Vote on Realms using FVT (Fragmetric Vote Token):

FIP-1 : Token Buyback Program | Fragmetric

We welcome your support in strengthening the Fragmetric protocol and driving sustainable growth.

[sytoshi]

what the fuck is this?
4% of revenue is a fucking joke. have some shame.
Do buyback of at least 50% of revenue or have rev-share 100% like $TUNA.
4% is nothing. this shit won’t even move.

[jeffkim]

Can you guys provide details on how much fragmetric earns as protocol revenue in the first place? 4% of protocol revenue as buybacks seems a bit too low even after a quick napkin math on fragmetric’s tvl.

[divinolm]

This is very low only 4% is shooting yourself in the foot

[Rrockybalboas]

como sao feitos os votos fiz o clain de FVT mas nao aparece na carteira nem vejo a forma de os utilizar o que fazer

[Fragmoto]

This is all? I like buybacks but the idea behind this token should be a real product.

[Gauntlet]

TL;DR

• The research team at Gauntlet ran a fresh token‑flow model using the official vesting schedule to evaluate the impact of this proposal.

• Assuming stable FRAG prices, our analysis show that allocating 4 % of protocol revenue (~$252k / yr) to open‑market FRAG buy-back will:

  • Inject a ~$5 k/week evergreen bid (≈8 %/mo of DEX pool liquidity).

  • Trim headline Y1 inflation from 15.25 % → 14.28 % of max supply (‑0.97 pp, a 8.6 % cut).

  • Remove 9.71 M FRAG (5 %) from circulating supply in year 1.

• Verdict: a simple and effective mechanism that generates real value for FRAG and aligns FRAG holders and protocol growth.

Updated Key Metrics

Disclaimer: For this analysis, we do not make any projections on TVL, APY, and FRAG prices, and simply assume they stay at the current amount as of July 24, 2025. The final impact is dependent on FRAG price movements.

Metric	Value
fragSOL TVL	$66M
fragSOL APY	9.56 %
Annual protocol yield	$6.3M
Buy‑back allocation (4 %)	$252k / yr
FRAG spot price	$0.026 USDC/FRAG
FRAG buyback rate	≈ 9.71M FRAG (1 % of max supply) per year

Impact on Circulating Supply & Net Inflation

Scenario	New FRAG unlocked in Y1	Buy‑backs burned	Net Δ supply	Inflation vs. Max (1 B)	Inflation vs. Start Circ. (202 M)
No buy‑back	152.5 M	0	+152.5 M	15.25 %	+75.5 %
With 4 % buy‑back	152.5 M	‑9.71 M	+142.8 M	14.28 %	+70.2 %
Impact	—	—	‑9.71 M	‑0.97 pp (‑8.6 %)	‑4.7 pp

• Baseline inflation: Without burns, Y1 adds 15.25 % of the 1 B max supply (or 75.5 % relative to the 202 M circulating at TGE).

• Buy‑back effect: Burning ±9.71 M FRAG trims headline inflation by 0.97 percentage points—a 8.6 % reduction on a max‑supply basis (or 4.7 pp on a circulating‑basis).

While not a full offset for the first‑year vesting cliff, the 4 % revenue loop does meaningfully flatten the slope and provides a continuous deflationary signal while bigger unlocks play out.

Buy Pressure and Onchain Liquidity

• Active Byreal pool: ~$286 k of liquidity

• Monthly buy‑back: ~$21k ≈ 7.3% of pool liquidity every month

  • Big enough to matter → steady upward drift

  • Small enough to avoid material slippage (spread < 0.3 %)

Future Implementation Recommendations

1. Burn default, treasury cap: Send 75 % of purchases to burn; hold up to 25 % for future ecosystem initiatives or liquidity‑bootstrapping.

   • Previous examples of protocol treasuries implementing a burn-versus-treasury model include Maker (now Sky) and Synthetix, with both generating positive impacts on their respective token utility.

2. Automate weekly TWAP: Use a permissionless keeper to execute buys over a 6‑hr window to smooth price action.

3. Dashboard transparency: Real‑time “FRAG burned” counter and hash‑linked transactions.

4. Scaling clause: When TVL crosses $250 M or new product revenue arrives, revisit the 4 % rate.

5. Add Revenue Sources: In the long term, FRAG holders would love to see other sources of revenue beyond fragSOL rewards, but we are in agreement that it is a great place to start the experiment

Why We are Voting YES

Based on the analysis above, we are confident the 4 % buy‑back:

• Adds real, continuous buy pressure (about 7 % of the trading pool each month) without distorting liquidity.

• Dampens first‑year inflation by ~9 % and creates an even stronger impact once the protocol revenue grows.

• Creates a transparent “success‑flywheel” where higher fragSOL TVL ⇒ more revenue ⇒ more burns ⇒ stronger FRAG signal.

[Rahulito77]

4%??? You might aswell no do any bucubacks if you are gonna do such a small ammount. Hyperliquid doing 99% buybacks day after day. if you guys think your token is worth holding do at least 50% buybacks

[pepo]

This proposal is very poorly communicated, I am asking myself if it is in purpose.

Looking on comments it is obvious people do not understand what the OP and Gauntlet mean by “protocol revenue” as OP and Gauntlet actually named the fragSOL yield to be the protocol revenue which I think is totally wrong. Yield is something that you commited to give to the users (investors) and in no world should be considered protocol revenue. All other protocols take some cut from yield they generate (for example Jito takes 3% of all yield they generate as a fee, aave takes the difference between borrowing and lending interest rate, etc. and this is considered a protocol revenue).

This proposal should have completely different wording. It should state that 4% of yield generated will be collected by protocol as a fee and 100% of the protocol revenues will go toward buy backs.

Also the feeble mind who wrote the first post and also the Gauntlet intern “forgot” to include (and here I am sure they didnt include it intentionally because this is totally obvious) the most important risk factor - taking 4% from yield will decrease the fragSOL APY from ~9.00% to ~8.64% which may affect TVL significantly.