TL;DR
To stabilize Klaytn’s ecosystem, a buyback is in progress:
- Klaytn Foundation’s stablecoin reserves will be used
- Only through spot purchases from the market (CEX)
- All KLAY purchased will be burnt
As discussed during our May AMA’s, the Klaytn team has been pursuing various strategies to achieve our goal of a more sustainable ecosystem.
Last Friday (October 21), the Klaytn team detected abnormal fluctuations in on-chain liquidity, and the decision was made to execute a market buyback of KLAY from the markets in order to stabilize Klaytn’s ecosystem.
The buyback is currently in progress and is being conducted as follows:
- Funds used for the buyback come from stablecoin reserves held by the Klaytn Foundation, secured previously from strategic partners.
- The buyback is strictly limited to spot purchases directly from the market (CEX) and is being strategically executed to minimize market volatility.
- All KLAY purchased via the buyback will be burnt.
The decision to execute a buyback was made in order to manage risks derived from the actions of certain entities. The Klaytn team believes this was the right decision to make in our pursuit of a robust ecosystem.
To prevent front-running or market manipulation, this decision was not announced in advance.
Additional factors that were taken into consideration during the decision-making process included the current macro and micro landscapes, and most importantly, community feedback and concerns; this is also in line with our recent Governance Proposal recommending a reduction in block rewards.
Updates regarding the buyback will be shared at a later date.
As always, the Klaytn team will continue focusing its resources on improving and evolving Klaytn’s ecosystem in all aspects, to maintain competitiveness in an ever-changing landscape.
[3Q Klaytn Ecosystem Update]
The 3Q Klaytn ecosystem updates will cover key initiatives the Klaytn team is currently undertaking in our continued efforts to achieve an optimal and sustainable Klaytn ecosystem.
