Thank you @ignas, for bringing this highly valuable and impactful strategic topic to discussion!
This is a very timely issue given the Projet Miró stage and the VLR launch, and although not decisive, it’s worth noting the recent poll shared on Velora’s Twitter, which shows broad community support for implementing a buyback mechanism.
We have a couple of questions regarding your suggestions and the open points you raised on how to structure such a mechanism. As you correctly explain in your post, currently around 80% of the protocol’s revenue is distributed in wETH to stakers through the PSP 2.0 fee distribution system -see here-. Therefore, implementing a buyback mechanism would require modifying this system, effectively reducing the APY that stakers currently earn. This would not necessarily be negative for them, since the goal of introducing a buyback is to create buying pressure on VLR, which could drive price appreciation, benefiting stakers even more than the potential reduction in the reward rate. Nonetheless, this is a topic that calls for careful consideration and a well-thought-out decision.
With that in mind, have you considered or formed an opinion on how the current reward distribution system could be adjusted? How much of the 80% of revenue currently allocated to staking rewards do you think would be reasonable to redirect toward a buyback mechanism?