YFI Buyback Auctions

As per YIP-56, we periodically buy back YFI with a portion of protocol earnings.

We’ve been experimenting with different options such as market orders on DEXes, OTC deals and, most lately, auctions. Gnosis has recently unveiled their system for batch auctions which seems like a perfect fit because it allows to determine a fair price and it’s not susceptible to frontrunning and is not dependent on the time of the bid.

There are currently two live auctions to buy back YFI:

The batch auction mechanism is presented below:

In case of inverted price (i.e. DAI per YFI) it works like this:

  1. The auctioneer sets the maximum price they want to pay (e.g. 1 YFI = 404,789 DAI)
  2. Bidders bid any amount of YFI at the minimum price they’d accept (e.g. 1 YFI = 60,000 DAI)
  3. Orders are sorted by increasing price and tallied until they fill the requested amount at the price of the current order, e.g. if there are orders for 1 YFI each at 60k, 80k, 100k, 125k, they will all be filled at 125k, with the last one being only partially filled, and the remaining orders untouched.

Update: another explainer


The first auction was only partially filled, it has bought 2.4291771207816 YFI for 109,422 USDC (45,045 USDC/YFI).

The second auction I deem successful, it has bought 8.6327361910850445 YFI for 404,789 DAI (46,890 DAI/YFI), which is very close to the market price at the moment ($46,887) and better than what we’d get with a market buy.

Previous buybacks

Date Method Bought Sold Transactions
2020-12-01 Sushiswap 4.256402968 180 ETH swap
2020-12-26 Uniswap 2.172542 79.98 ETH swap
2021-02-11 Sushiswap 3 76.04 ETH swap
2021-03-25 OTC 6.180626332 200,000 USDC incoming, outgoing
2021-04-07 OTC 5.169962518 200,000 USDC incoming, outgoing
2021-04-14 OTC 5.558643690 250,000 USDC incoming, outgoing
2021-04-17 Gnosis Auction 2.429177120 109,422 USDC initiate, settle
2021-04-18 Gnosis Auction 8.632736191 404,789 DAI initiate, settle
2021-04-24 1inch 2.430758034 100,000 USDC outgoing, trade, incoming
2021-04-26 1inch 2.302923104 100,000 USDC outgoing, trade, incoming

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