REZ Buyback & Burn Program

Proposals
1

REZ Buyback and Burn Initiative: Targeting 10% of Total Supply Over 6 Months

Proposal Author
Renzo Protocol, Core Team – Submitted on October 10th, 2025

Summary

This proposal outlines a structured buyback and burn program for $REZ tokens, utilizing protocol revenue to reduce the total supply of REZ. The program aims to repurchase 10% of the total REZ supply (1B REZ) within 6 months, starting with an initial (1% of total REZ supply) purchase that has already been executed. Future protocol revenue (75-100%) will fund ongoing buybacks, with 90% of acquired REZ burned and 10% distributed to ezREZ stakers. Transparency will be ensured through monthly reports and a Dune dashboard. At the end of the 6 month program period, the total amount of revenue used to fund buybacks and burns will be adjusted based on protocol needs.

Motivation

The Renzo protocol is generating significant revenue, providing an opportunity to enhance token value through supply reduction. Allocating a portion of acquired tokens to ezREZ stakers incentivizes long-term participation and aligns incentives across all stakeholders. This program demonstrates responsible use of protocol funds, fosters trust, and supports sustainable growth.

Proposal Details

Program Objectives

  • Target Buyback Amount: Target a buyback quantity equivalent to 10% of the total REZ supply.
  • Target Burn Amount: Target a burn quantity equivalent to 9% of the total REZ supply (90% of total buybacks)
  • Target ezREZ Allocation Amount: Target a ezREZ allocation quantity equal to 1% of the total REZ supply (10% of total buybacks)
  • Timeline: 6 months from the date of proposal approval, or until the target is met, whichever comes first.
  • Funding Source:
    • Initial allocation: 1% of the total REZ supply (approximately 100M REZ) has already been purchased between October 8th and 9th, 2025, using a portion of Q3 2025 protocol revenue from the following wallet: Address: 0x8d8Cf665...d26B28599 | Etherscan
    • Ongoing: 75% to 100% of all future protocol revenue within the 6 month program period (determined based on operational needs and community feedback).
    • The protocol may tap into historical revenues for discretionary buyback and burns.
  • Termination Conditions: The program ends when either 10% of the total supply has been bought back (and subsequently burned/distributed) or after 6 months, regardless of progress. I.e. If 10% of the total REZ supply is purchased before the 6 months then the program ends. Alternatively, if at the end of 6 months, 9% of total REZ supply was purchased, the program would end and require a new governance proposal for additional buybacks and burn.

Implementation Steps

  1. Proposal Approval: Upon passage via Renzo governance voting, the program activates immediately.
  2. Initial Integration of Purchased REZ: Incorporate the existing 1% REZ purchase into the program for burning (90%) and distribution (10%).
  3. Revenue Allocation: Redirect 75 to 100% of all protocol revenue streams (e.g., fees from staking, restaking, instant withdrawal and fees from new products) to a designated buyback wallet or smart contract.
  4. Buyback Execution: As revenue is routed to the public wallet, the team will integrate a bot that will periodically market buy REZ minimizing slippage. Buys will be executed fully on-chain.
  5. Burn: The $REZ token contract is non-upgradable and therefore does not have the ability to burn and reduce total supply. Thus REZ tokens will be sent to a specific burn address that will reduce the total supply. https://etherscan.io/address/0x000000000000000000000000000000000000dEaD
  6. Monitoring and Reporting:
  • The Renzo team will publish a monthly report detailing revenue allocated, REZ bought, burned, and distributed, including transaction hashes.
  • A public Dune dashboard will be created and maintained for real-time tracking of program metrics, such as total burned, progress toward 10% target, and revenue usage.

Risks and Mitigations

  • Market Volatility: Buybacks could influence REZ price; mitigated by gradual execution and monitoring market conditions.
  • Revenue Shortfall: If protocol revenue is lower than expected, the target may not be met within 6 months; the program will still terminate at the deadline.
  • Smart Contract Risks: All burns and distributions will use audited contracts.
  • Community Feedback: If issues arise, a follow-up proposal can adjust parameters (e.g., revenue percentage).

Voting Options

  • Yes: Approve the buyback and burn program as described.
  • No: Reject the proposal.
  • Abstain: No opinion.

This proposal, if passed, will empower the Renzo team to execute the program while maintaining community oversight through transparent reporting. Community members are encouraged to discuss in the Renzo forums or Discord prior to voting.

1 Like
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I agree REZ Buyback & Burn Program Proposals

2 Likes
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Yes: Approve the buyback and burn program as described.

2 Likes
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I agree RP6 . Good for renzo long time

2 Likes
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Feedback on REZ Buyback & Burn Proposal (with Research Context)

Thank you to the Renzo team for putting forth this proposal. It’s encouraging to see the protocol returning revenue to tokenholders. That said, I believe it’s critical for voters to weigh both the promise and the risks of combining buybacks, burns, and token redistribution in one coordinated motion. Below are my thoughts, backed by examples and research, along with requests for clarification.

1. The Need for Revenue Details & Transparency

The proposal states, “The Renzo protocol is generating significant revenue…” but to meaningfully evaluate the proposal, the community should have access to:

  • Revenue numbers over the past 6, 3, and 1 month intervals.

  • A 12-month trendline (i.e. month-to-month revenue growth, seasonality, downward/flat/expansion)

  • Breakdown by revenue stream (staking fees, withdrawal fees, new product fees, etc.)

  • Volatility or tail risk (i.e. how revenue behaves in bear vs bull cycles)

Without those, it’s hard to judge whether redirecting 75–100% of future revenue to buybacks could reasonably acquire 10% of total REZ supply within the 6 month allotted timeframe. This information should be included in the proposal alongside a spreadsheet or financial model while forecasting future revenue (base case, bear case and bull case) generated over the next 6 months.

2. Separating the Buyback + Burn + Redistribution Proposal versus One Vote

By combining all stages (buyback execution, burn, and 10% redistribution) into a single governance vote, the proposal forces voters into an all-or-nothing choice. Many of us may support buybacks but oppose burns or token redistribution structures.

A more systematic approach is rational and aligns with best practices in governance disclosures (e.g. “separate votes for capital deployment vs token usage”). The proposal would be stronger if separated into individual proposals such as:

  • Proposal A: Approve use of protocol revenue for buybacks (market purchase of $REZ) over a 6 month period.

  • Proposal B (after A passes): Decide the fate of purchased REZ (burn, hold in treasury, or strategic redeployment).

The separation of these proposals preserves optionality for the protocol and lets tokenholders express granular preference.

3. Critiques & Risks of Token Burns (and Redistribution)

Below are some of the criticisms and risks around burning tokens, drawn from broader crypto research and commentary:

A. Token burns remove future optionality for the protocol to use REZ tokens more strategically. Once tokens are burned, they are irrevocably destroyed. That means lost flexibility to redirect them toward future ecosystem incentives, partnerships, liquidity provisioning, or emergency funding. This is a common critique of burn models.

A blog post dated 2020, published by Placeholder VC shares a similar view and can be read here: https://www.placeholder.vc/blog/2020/9/17/stop-burning-tokens-buyback-and-make-instead. In the post, they make the case that there are better uses for bought back tokens than simply incinerating them. 2025 has been a showcase year for demonstrating the value of buybacks but it’s important to recognize that very few of these teams have chosen to burn the tokens. This is an evolution of the process and one that I think Renzo should heavily consider and bring a compelling case forward prior to moving forward with a burn mechanism.

B. Token burns are not a guaranteed value multiplier. Scarcity (via burn) only helps if demand holds or increases. If demand is weak, burning tokens won’t magically create value. Sustained buybacks do create buy pressure, which can contribute to investor confidence in buying and continuing to hold a token (there is a marginal buyer), but the important aspect of buybacks is that the protocol believes the token is currently undervalued at current prices.

While the announcement of a token burn can create newsworthy hype for the protocol and its token, it’s unproven that burning tokens creates long-term value. If poorly executed, token burns can create higher short-term price volatility and require ongoing communication with platforms that disclose circulating supply and total token supply, which is now variable and changes over time (ie, coinmarket cap, coin gecko, etc.).

C. Redistribution to stakers (ezREZ) is redundant in a buyback model. Redistributing 10% of the buyback to stakers effectively dilutes the simplicity of the mechanism. The conventional logic behind a buyback is that tokenholders benefit indirectly via reduced circulating supply and upward price pressure. The buyback is a form of in-kind distribution that benefits existing token holders. Adding a redistribution layer complicates the narrative and may lead to double claims (i.e. stakers getting extra vs price uplift).

The price impact of buying back tokens to redistribute to stakers likely creates additional selling pressure into the buybacks. If the team’s position is that the token price is viewed as undervalued, what is the rationale behind distributing the token purchased at this lower-than-warranted price? It would be best to refrain from redistributing token buybacks.

Separately, the value in REZ as a governance token should be apparent from the role governance plays in activities like voting. If REZ wants to move towards becoming a yield-generating token, it’s far more valuable if the distributions are paid in the revenue generated (ETH, SOL, etc.) rather than paying out REZ holders in REZ tokens that the treasury used funds to buy back.

In my opinion, either 10% of revenue should be distributed to ezREZ holders in the actual revenue or they should not receive any benefits from holding ezREZ.

D. Empirical evidence on sustainability is mixed. Analyses of protocols that employ buyback and burn mechanisms show mixed outcomes. Some protocols benefit while others don’t outperform peers without such mechanisms.

Buybacks in crypto diverge from traditional share repurchases; they require sustainable earnings and careful design, or they risk being short-lived or speculative. We should heavily weigh the cost and benefits of a burn mechanism.

4. Questions & Clarifications Needed

To ensure community confidence and prudent execution, I kindly request clarity on:

  1. Structure of the proposal(s): Separation of the current proposal into individual proposals that separates the use of protocol revenue from the subsequent actions performed with the bought-back tokens.

  2. “75–100% of future revenue”: Who defines the exact percentage? Are there triggers or thresholds (e.g. revenue buffer, contingency reserve) that modulate this?

  3. Pacing limits: What caps or maximums are placed on daily/weekly buy volumes or slippage to avoid market disruption?

  4. Redistribution mechanics: What formula or mechanism will allocate 10% to ezREZ holders? How will that interact with the price effect of buybacks?

  5. Burn address & verification: Given REZ is non-upgradable, how will the burn be verifiably enforced, and how will the community audit it (Tx hashes, trails)?

  6. Fallback contingencies: If revenue dramatically underperforms (e.g. bear market), will the buyback program pause or scale back rather than commit full quotas?

5. My Position

  • I support a disciplined, transparent buyback mechanism, subject to revenue durability and risk controls.

  • I do not support burning 90% of purchased REZ, because it eliminates strategic flexibility and relies on speculative demand uplift.

  • I oppose redistributing 10% of buybacks to ezREZ holders and believe this introduces redundancy and complexity in how capital and value is created for existing tokenholders.

6. Conclusion

Because the buyback, burn, and redistribution features are bundled as a single proposal, I will likely be a vote of “No” on the current proposal as drafted. That being said, I am enthusiastically in support of a clean buyback-only proposal with a separate, optional governance vote later on token use.

1 Like
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Sí: Aprobar el programa de recompra y quema tal como se describe,

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Following community feedback, RP-6 will be split into 2 Snapshot votes:

  • Buyback (A): Use protocol revenue to repurchase 10% of the $REZ supply
  • Burn (B): A follow-up proposal to burn the acquired $REZ over the stated timeline and mechanics.

Next Steps

  • A snapshot vote for RP-6(A): A proposal to use protocol revenue to repurchase 10% of the $REZ supply

:warning: Team/Foundation wallets are excluded from voting in this proposal.

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RP-6(A) Snapshot proposal - https://snapshot.box/#/s:renzogovernance.eth/proposal/0x133a9780ecf930030d8d336dec7f859960f4d69c6a90280038f886d5563eacd6

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RP-6(B) Snapshot Proposal is live on Snapshot - https://snapshot.box/#/s:renzogovernance.eth/proposal/0x6dd4effae7b7bf1e9e3eb221c1c4b21cc79dacb910529e78051fd3aa57142efe

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Since there was no discussion for RP-6(B)’s proposal, I’ll write down my thoughts here in hopes they reach someone at Renzo. The proposal, as it’s currently written is flawed and should be taken down.

There is no way to decline the entire proposal. Meaning, that whatever you vote for you implicitly agree that 10% should be distributed to ezREZ holders (something I fundamentally disagree with).

There is no way to NOT vote for 10% of the buybacks to be distributed to ezREZ holders. Token holders are only being given an option on whether to burn or hold 90% of the buybacks. What about the other 10%??

For some reason, there are no options to NOT distribute 10% of the buybacks to ezREZ holders. The option to distribute anything to anyone should be a separate proposal and this looks more like a proposal that drags-along something that I think is being overlooked.

As stated in my tweet here: https://x.com/VelvetMilkman/status/1982822265864528172

*Distributing 10% of the buyback to ezREZ holders should be a separate proposal altogether.

Proposal 6-B should have asked what to do with 90% of the buybacks (the treatment for the remaining 10% of buybacks will be voted on in a separate, 6-C proposal).

The options then could be A, B, or C without forcing every voter to implicitly choose to distribute 10% of the buybacks to ezREZ holders.*

*It’s also another reason why governance proposals should always go through the proper channels and be posted in the forum ahead of submitting the proposal for vote.

I’m not really sure there’s any way for me to vote against the existence of this proposal.

In light of the issues raised above, Figment Capital will not be voting on this proposal.*

The community should have the ability to offer feedback in advance. It’s even more frustrating because my initial response pointed out that distributing buybacks to holders is something we at Figment Capital are against. Seeing that there is no option for this scenario is really frustrating.

1 Like