Iron Bank Revenues - buyback and burn/build treasury

Hello everyone,

I write to congratulate the CREAM team in implementing the Iron Bank and creating a novel use to secure undercollateralized loans.

The increased utilization of certain coins via CREAM will incentivize organic liquidity on CREAM and create a positive feedback loop of supplying and borrowing on CREAM, resulting in a significant increase of revenue to the protocol.

These revenues from the Iron Bank could be designated as funds to reward holders and users of CREAM by increasing the value of CREAM. A possibility is to put the funds into two buckets of (a) buyback and burning circulating CREAM tokens and (b) building a treasury to be used for the sole purposes of maintaining the Iron Bank and its business.

Despite the various criticisms of buyback and burn, several protocols and exchanges like Celsius and FTX Exchange successfully practice regular buybacks.

My current proposal is to split Iron Bank revenues 50-50 with respect to the (a) buyback and burn and (b) Iron Bank treasury.

I look forward to discussing!!!

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This is great, but I believe there was a previous proposal that shows the CREAM multisig will allocate around $300k to a buy and make strategy with funds reallocated from CreamY Swap and CREAM Swap. I personally prefer buy and make vs. buy and burn because it is more capital efficient - burned tokens are wasted when they might be reallocated to drive future incentives.

The team has also mentioned they are working on a new token model and I hope they take this into consideration.

Hello! I think having a discussion is the proper move. Again, CREAM is accumulating a treasure chest of revenue and the governance can move the treasury in the proper direction.

As long as a proposal incentivizes the usage of CREAM and provides value for the token I will support. If there is an efficient use of the extra revenue, that’s fine by me.

I focus on the token because a higher token price -> increased use. That along with the Iron Bank business is a particularly unique opportunity.

Are you familiar with any community members? I think we can start having real conversations and drive tokenomics towards users and holders of CREAM.

This plan sounds good, but instead of doing a 50-50 split, I think it would be better to do a 40-60 split where 40% goes to token burn and 60% goes to building the treasury up.

A token burn will result in scarcity, which should have an upward effect on price, but in order to have long-term price growth, Cream needs to keep developing the Iron Bank.

The Iron Bank is one of the most innovative things that Cream has done to date. Cream Finance is now the only protocol that is giving the equivalent of a corporate line of credit to successful partners who meet the whitelist criteria. Lending through the Iron Bank will increase the inflows of capital into Cream, so I think that while a token burn is a good idea, it would be more beneficial in the long term to allocate funds to grow the Iron Bank.

The success of the Iron Bank will move the price of Cream tokens. I would even be in favor of a 30-70, but I think 40-60 is a good plan that others would more likely be in favor of.

A topic I am looking forward to hearing more about. Seems really early on in the development of Iron Bank (defi in general) to be be worried about returning excess capital via buyback/burn. I would focus on securing treasury, and reinvesting in new products/partnerships, ways to incentivize best devs etc.

90/10 with most of reinvestment back in treasury for 1st few years, and begin increasing token-friendly activities once there are less attractive opportunities (industry matures)

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Thanks for responding! The goal of this to drive discussion about increasing value capture of the CREAM token for holders and users of the platform and I think we are doing that.

Framing this discussion is important. I don’t think this is a question of what to do with excess capital, it is what to do with this new capital. As a user and holder of the CREAM protocol and token, that is a priority for me.

What have been some innovative things you guys have seen in the crypto space so far?

I think we have a real opportunity here!’

I’d also favour a buyback-and-make vs buyback-and-burn approach as it keeps the value flowing within the ecosystem.

I will support split too burn and building. Burn is good and building is good too. Can someone prepare draft proposal maybe and we can publish it.
If anyone have ideas please share. What team thinks about best use will be interesting to most members.

If we find good use case for the tokens this will benefit the project and the investors.

I would be happy to draw up a proposal. The cream protocol is too productive and too strong for its current mediocre price action. I really do like the buyback and burn without any specific description of how to otherwise use the funds. What do you guys think!