Returning Value to ANT Token holders via Buyback

Author’s Note - For transparency, we are posting our original buyback proposal. This was written prior to the events of this week (approximately 1 month ago). Overall, we really like Luis’s proposal, but think the continuous structure of the buyback proposed here might work better for alignment and potentially cost less than the proposed $30m. We look forward to working with Luis, token holders, and the team to find a solution.


This proposal outlines a large buyback of ANT to help return value to ANT token holders and close the gap between ANT’s market cap and book value. It also outlines suggestions to further defend the book value in the future.

Current State of the DAO and Treasury

Currently, the treasury represents ~$200m mainly coming from an Early ICO and a well-managed treasury.


Arca Internal calcs, Aragon Finance Tracker, Updated: 5/12/23

Note, this is an estimate and is missing NATION tokens from the tokenswap as well as some of the venture investments made by Aragon which should likely be included in the treasury and book value per token calculation. Since these are just estimates, a full audit should be done by the team during discussions of any buyback proposal.

However, from a token standpoint the product gets very little recognition with a ~$130m market cap (coingecko).


Arca Internal calcs, Aragon Finance Tracker, Updated: 5/12/23

ANT currently trades at 0.5x-0.6x P/B and a full dissolution would result in ~$5 per ANT. These numbers are subject to change as prices of the treasury assets change. This is calculated by subtracting the ANT held by the treasury from both the treasury assets as well as the circulating supply as we have seen with other DAO dissolutions. This is a buyback proposal, not a dissolution proposal, but the math is the same. We believe this negative value stems from a few key reasons:

  1. No clear revenue streams while having a higher than average OPEX spend leading to continuous slow treasury bleed.

  2. Lack of clear tokenomics or ideas where sustainable tokenomics could be built into the current product offerings to offer more utility and retain value. It is unclear whether or not Aragon is trying to be a public good or not.

  3. Current DAO structures common in digital assets are using other product offerings over Aragon’s DAO offerings, using tools such as Snapshot vs Voice or other voting tools within the Aragon App. We believe this will start to change over time with the recent launch of v2.


Dune Analytics, DAO Creator Tools

  1. Slow shipping times leading to overall lack of excitement for the product offerings and, in turn, low community turnout. This has been showcased in the slow process to move to a new DAO scheduled to be completed last November and then pushed to February. We believe that this led to apathy by token holders to the point that when USDC depegged (a large portion of the treasury), there were no comments or discussions about it in the discord.

I list these items strictly from an outside investor’s perspective on the areas that Aragon need to address going forward to achieve their long-term goals. To be clear, this is not a dissolution proposal. It is clear that Aragon is trying to push forward DAOs and social coordination, something we see as a net positive for the space. Aragon has also supported numerous DAO hackathons which we view positively. We don’t believe those things should change nor do we think our proposal will have any impact on Aragon’s ability to continue to support the broader industry.


Given excess capital on hand, we propose allocating up to 50% of the non-native token treasury to continuous buybacks up to book value. This buyback should set a floor price at 0.95x BV/ANT. Should this buyback be continuous we think it would significantly improve LT alignment and potentially use less capital than a short term buyback or a rage-quit. Having a continuous bid de-risks ANT as an investment while the team builds out its product offerings and adds token utility. We do not expect the whole allocation to be needed. If this proposal passes we believe a firm date of one week post governance vote should be when the buybacks start.


With the massive discount to book value, we think a significant buyback is justified for the following reasons:

  1. This will prevent a dissolution proposal and allow Aragon to continue to build as it closes the discount gap providing value to token holders. This has already been discussed in the Discord channel and a buyback will help prevent future dissolution efforts.


  1. Aragon has done buybacks in the past. Given that ANT can then be sold again in the future or distributed via grants/incentives, we see a buyback as value accretive in terms of protecting against a dissolution. Further, redistribution would be value accretive to re-develop a vibrant community.


  1. This proposal should not have a material impact on Aragon’s runway. Given the current spend of $10.2m for all sub-guilds/development teams there would still be nearly 9 years of runway at the current spend post-buyback.


Aragon DAO Vault Position

The 9- year expected runway does not take into consideration the current treasury management plans that will yield returns to the treasury and extend the runway.


Financial Guidlines Proposal

Given that a 12 to 18 month runway is typical for earlier stage projects, 9 years of runway (post buybacks) seems more than adequate for Aragon to continue to build out their product offerings as well as find ways to incorporate revenues into the product.


With the steep discount to book value as well as an excessively long runway, we believe that Aragon committing to a significant buyback is the best use of capital to return value to token holders while still being sufficiently capitalized to build out their product offerings. We are open to further discussions around the total allocation to the buyback and book value defense but given the treasury excess and lack of material impact to the runway, we believe this is a good starting point. We look forward to further discussions and fleshing out the next steps with the community.


I completely agree with your assessment. The proposed ANT buyback seems a smart use of our excess treasury and a strong opportunity to add value for token holders. As a long-term believer and holder, I’m in favor of this proposal and I look forward to collaborating on refining this approach.


Thanks for the proposal! How would you propose doing the buyback on the open market using a smart contract or an MM. To avoid any tax, we will need to add more around builders and distribution. Any thoughts on this?


Aragon has built substantial infrastructure provided to the world for free. Its one of the few (probably the only) organization in the space that survived the walk-out of its entire contributing team. The entire team is post-2021 so the mental model of treasury as runway is broken. Its more an endowment fund for a public infrastructure project than a runway for a startup. Not saying if its good or bad and whether it matches the original ICO objectives, but that’s how it has evolved

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Where has the AA been throughout these conversations? Would be nice to hear from them

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Its hard without fully understanding the tax implementations, would love the AA to provide some clarity there. The Temple team was pitching RAMOS to me and that seems like an interesting idea from my small understanding on this haha

The main thing we are looking for is something that both closes the discount gap and prevents it from opening in the future. This de-risks ANT from the perspective of token holders, but more importantly allows for the Aragon teams/sub-guilds to ship and build a “premium” to book value that can be seen in other DAOs. That is the end goal we are looking for, and open to really any solution that can get us there as long as it is done in an open, transparent, and timely manner!

Hi Alex,

I believe this is covered in the other thread.

Hope it’s clear enough,



Thanks, that makes sense, I think something basic around the YFI model would work. Pulling some thoughts together on how we could add something around builders.


So you’re saying it’s ok to rug the ICO participants who funded the project so that the team can enjoy nice salaries while working on pet projects that will never be used?

Who is talking about Rugging, I have been in here engaging productively.

Hi, no worries about you - I was referring about BearBudget’s remark about the repurposing of the treasury and the general goal of the project.

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Also just to flag that the teams came in to the DAO in good faith, first teams to do that at Aragon and were transparent with our roadmap, plans and budgets. We are here to make the DAO work and build a product with PMF. Also the current team has been here from less than 2 years.


Disclaimer: This is purely my personal opinion. I’m serving as Executive Director of Aragon Association since 01.07.22 in a 1y tenure and also sitting at AA committee since 18.12.22. I plan to stay at the Committee until most of the treasury have been safely transferred to the Aragon DAO. I don’t speak on behalf of AA. Not investment advise.

Thanks for your proposal and for making your intent clear. I would like to focus my reply on the core topic of your proposal.

Few comments:

  • I agree that a treasury diversification initiative such as the one your propose would help mitigate the current discount to book value. However, the perceived gap is not as large as you point out. Please note that there’s at least around $40M of funds that can not be transferred to the DAO, as Luis pointed out here. The final transferable amount may also differ depending on the needed OPEX for AA and Aragon Shield Foundation.This significantly reduces the perceived gap between MCAP / BV. Having said this, I am still support of increasing the available ANT to distribute across aligned stakeholders.
  • Aragon DAO has as a Guideline (indirectly enforceable by token holders) to cap its yearly OPEX to 10% of the treasury. I believe that is more than enough to cover current Guilds runaway. There’s also a Financial Guideline to use 25% of the treasury to be deployed in Yield generating initiatives. So, I agree on the statement that there’s excess treasury that could be deployed. It’s important to balance that with keeping enough runaway for further OPEX.
  • On buying ANT as treasury diversification: I have believed in the benefits of doing such a move for a long time. In fact, I defended for a larger purchase of ANT back in Q4 2022, and I was the one proposing it at the AA Committee back then. The only reason we didn’t do a larger one was because we wanted to wait until being able to do so via the Aragon DAO (and we could not do it yet via the DAO as the Delegate voting system was being developed).

After reading all the feedback from different proposals in the forum, I have asked our legal counsel to see if there are ways to address this. While AA can not perform a pre-announced “buyback” for the reasons I already explained here, there may be a way for Aragon DAO do achieve that. I’m not a lawyer, so @ronald_k please confirm that I am not missing anything here. This can be further validated with 2nd opinions if needed by the Aragon DAO.

It’s my intent to provide clarity on some constraints so that the community can work on a proposal that can be voted in due time in Aragon DAO.

Constraint 1

Funds to deploy must be Aragon DAO’s, not AA’s.

AA can’t do it on behalf of the DAO. While AA can do treasury diversification operations to support the development of the project if not pre-announced and at open market (and has done in the past), doing such a movement now when we should be moving the funds to the DAO is not aligned with what we intend to achieve (which is to transition the treasury towards the DAO).

As soon as the funds are in the DAO, the DAO it’s sovereign to decide what to do with those funds (including treasury diversification!). Please note that the Aragon DAO has a system for checks and balances (Guardians), which have the obligation to veto proposals that may result in ANT being considered a security. For this reasons, I believe it’s super important to already engage in this conversation on what are the constraints that should be considered when making a treasury diversification proposal in the DAO. AA will continue with its plan towards decentralizing the treasury, and next week I’ll provide an updated roadmap with clear times and expectations, so that this type of proposals can take that into account.

Constraint 2

Funds must be used towards the advancement of the project.

The ANT purchase could be done programatically using YFI’s buyback smart contracts (or similar). It would be fairly straightforward to implement a smart contract that received the bought ANT programatically, and distributed it across stakeholders who provide value to the project: governance work (wANT or veANT holders if that was to be changed), LPs providing liquidity to ANT pairs in DEXs, DAOs bringing TVL and usage to the App and aragonOSx, Plugin Developers… It would be up for token holders to decide on the specific allocation to distribute across differents actors / pools. So, instead of a simple “buyback”, this would be more of a “Buy-And-Make” (copied from Joel Monegro’s post on the model here. @juareth wonder if a Smart Balancer Pool would make sense here.

This would help mitigate the underlying problem and increase ANT ownership across those parties who provide work and value towards the project. Therefore, the used funds would be deployed in alignment with the purpose of the project.

Constraint 3

It must be done over an extended period of time (months)

Time-limited but extended in time. This is important, so that it becomes clear that the operation is not intended to provide a quick profit to certain actors, but part of a broader initiative that helps push the project forward.

I hope this sparks a constructive conversation across token holders that can lead to a solid proposal that can gather enough support in Aragon DAO.


Im still quite lost on this 40m numbers. Can you link me to recent transparency reports? Grant information? I have scoured and have found little to no information and question where this 40m number came from. More clarity would be needed here

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Thanks for the proposal Alex.

I was initially leaning more toward ragequit, but because of your proposal a few points clicked and made me realized buyback > ragequit. You already make some of these points in your proposal, but just posting a rewording of them in case it’s helpful for someone else:

  • If you can keep a floor, ANT holders are not incentivized to sell because they are exposed to upside and not downside. Because of that, it can indeed end up being cheaper than it seems.
  • Ragequit will depend on other factors like whether it’s time-limited, or whether the principal will get invested, making it harder to ragequit. It is less predictable for ANT holders, thus makes it harder to set a floor.
  • The bought back ANT can be burned, further helping cement a floor.

Just something to add that I found hard to understand at first:

-Book Value rises with every $ANT bought back below book value and burnt.

But that increase is balanced by a decrease in the treasury, right? Sorry if I’m missing something obvious.

Not quite, because it was bought back below book value, the difference between book value and the price at the time of purchase is then gained by the treasury / BV.

Example 1 - Buyback at Book Value

  • Book Value = $1
  • Buyback Price = $1
  • Difference between BV & Price = $0
  • Token is burnt, there is 1 less supply
  • BV stays the same.

Example 2 - Buyback below Book Value

  • Book Value = $1
  • Buyback Price = $0.60
  • Difference between BV & Price= $0.40
  • The token is burnt, so there is 1 less supply
  • BV increases, that $0.40 is now shared between remaining supply’s BV

I am stoked to see these discussions taking actual shape.

As I outlined in Exit and Voice having an exit mechanism is an important first step. As discussion is starting to get focused we can push further structure around it maybe in a new thread:

  • rage quit vs buyback - sentiment here feels more on the buyback side but maybe a signalling vote as the forum is very easily Sybil-ed (a Snapshot temperature check can be a shortcut)

  • Exit tax as proposed by @alex-arca (at 5%) with the implication well articulated by @ant_holder (I personally think the 40% example is a bit rich, but will assume this is just to illustrate a point)

  • What to do with the ANT that’s bought back - I personally love the idea of @luis to just burn it as it is the cleanest path

Calculating the BV per ANT is going to be probably the most contentious part. I think it deserves a thread in its own, where we hash out:

  • Getting a more complete picture of the current assets and liabilities of the treasury
  • Getting a more specific insight into the $40M Swiss tax provision - its a massive chunk that needs to be explored in more details
  • Are there illiquid assets and what to do with those
  • The ANT supply - I personally disagree with @alex-arca calculation. Removing the ANT held by AA from the supply makes sense in dissolution. As Alex himself points out - this is not a dissolution. Attributing 0 BV to the future token holders compromise the purpose of these ANT reserves as an incentive mechanism. Moreover insisting that is the case can push AA to rush in distributing those prematurely before an adequate mapping of which stakeholders should be incentivised, just to be able to preserve the value of the incentives.[Making a point around the contentiosness of the topic. Ideally would want to have this discussion in a separate thread]

I firmly believe that giving the discussions more structure will help us move faster in shaping up actual proposals that can go up for voting.

How shall we proceed with the discussions?

  • Keep going as is
  • Two new focused threads - one on exit (RQ vs BuyBack + parameters) and one on BV per ANT

0 voters

If we go for the new threads I will set those up and link all relevant existing ones, or someone else can volunteer, just flag it so we don’t end up with forked threads again

P.S. giving 24 hours for voting

I think the treasury should be transferred to the dao first before the dao makes any decisions.